Poor Chinese data adds some pressure to markets

Wednesday, April 16, 2014

China’s economic growth slowed in Q1 2014 to 7.4% compared to 7.7% in Q4 2013, its slowest pace in 18 months. Industrial output rose by 8.8% in March, missing analysts’ expectations, while retail sales figures remained fairly robust after rising further by 12.2% y/y. China’s stats bureau reported that economic growth for Q1 2014 has been in reasonable range, but still faces downward pressure. The Hang Seng index retreated following the data releases, trading slightly lower around the 22650 points, down 0.1%. The Nikkei index has posted strong gains, breaching above the 14400 level, gaining 420 points (+3%).

China GDP over 20 years

 CNGDPC$Y Index (China GDP Consta 2014-04-16 08-49-50

Nikkei Index

NKY Index (Nikkei 225)  Daily 16 2014-04-16 08-50-26

European equity markets rebounded in early trading this morning supported by gains in the Asian and US equity markets. The euro has slightly strengthened, trading above 1.38 against the US dollar, while the Eurozone’s inflation data will provide further momentum to the market.

In the US, the Dow Jones index extended gains on Tuesday, ending 0.55% higher, while the S&P 500 and the Nasdaq have also climbed higher by 0.68% and 0.3%, respectively. The release of the US industrial output, building permits and house starts could offer a further sign for today’s trading session.

 

Oil: China's implied oil demand declined by 0.6% in Q1 2014 as a slowing economy restricted energy use, forcing oil refiners to reduce crude runs and increase oil exports in order to cut high fuel stocks. Brent front month futures have been consolidating around $109 per barrel in early trade this morning. The release of the weekly EIA oil inventories report will give an outlook about the US oil fundamentals.

Gold has been consolidating around $1300, while increasing tensions between the West and Russia over Ukraine could offer some upside momentum to the precious metal.

Brent Front Month Futures

CO1 Comdty (Generic 1st 'CO' Fut 2014-04-16 08-51-15 

 

Events for today:

 

CN

Mar

Retail Sales

CN

Mar

Industrial Production

CN

Q1

GDP

0930

UK

Mar

Claimant Count

1000

EZ

Mar

Inflation Final

1330

US

Mar

Housing starts

1415

US

Mar

Industrial Output

1415

US

Mar

Capacity Utilization

1530

US

w/e

EIA Energy Stocks

 

All times UK Local Time

 

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