Chinese economic data increases risk appetite

Monday, November 10, 2014

China’s CPI remained near a 5-year low at 1.6% y/y in October, unchanged from September ’14, while PPI declined to -2.2% y/y in October compared to -1.8% in September, missing analysts’ expectations. The Hang Seng index surged nearly 200 points (+0.85%) towards 23,750 following the release of the Chinese inflation data. The Nikkei index remained under pressure falling 100 points (-0.6%) to retest 16,780.

China CPI data

CNCPIYOY Index (China CPI Yo Y)   2014-11-10 08-41-19

According to the Financial Times and Bloomberg, international investors will soon get direct access to Shanghai stocks. The Hong Kong-Shanghai stock connect will start on November 17, giving investors the chance to buy stocks in Hong Kong-listed companies and vice versa.

Japan and China held their first summit meeting in 2 ½ years, as the Asian leaders looked to ease tensions over territorial disputes and wartime history. Prime Minister Shinzo Abe reported that his meeting with Chinese President Xi Jinping was the first step toward improving bilateral ties, according to Bloomberg.

In the UK, this week the main focus will turn to the Bank of England’s quarterly inflation report as market participants would like to have a possible timeframe about when the Bank of England will begin increasing interest rates. Today, the release of Eurozone Sentiment index will draw investors’ attentions. The euro edged higher to retest 1.247 against the US dollar in early trade this morning.

Precious metals remain under pressure this morning with Gold spot trading lower (-0.45%) towards $1160/ounce, while Silver spot remained below $16. Crude oil prices edged higher in early trade with Brent front month futures climbing towards $84 per barrel, following the sharp selloff in the last few trading sessions. WTI front month futures remained under pressure below the key level of $80 per barrel, consolidating around $79 in early trade.

XAU- Gold Spot 

XAU Curncy (Gold Spot   $_Oz )  D 2014-11-10 08-42-01

 

Events for today:

 

0530

CN

Oct

CPI & PPI

0930

EZ

Nov

Sentiment Index

 

All times UK Local Time

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