13 May 2015
China economic slowdown continues – SG
FXStreet (Barcelona) - Kit Juckes of Societe Generale, sees the bounce in commodity markets as being offset by slowdown in the Chinese economy.
Key Quotes
“Weak Chinese data were not a surprise after the weekend policy move (IP +5.9% y/y, retail sales +10%y/y, capex + 12%y/y) but confirm that the economic slowdown continues. For how long can markets be comforted by PBoC easing against this backdrop?”
“Equity markets are stronger across Asia but while nothing is happening in AUD/USD or NZD/USD, we remain medium-term bearish of both. The bounce in commodity prices is helping calm markets but the Chinese slowdown will continue to act as an anchor.”
“It rather sums up the current market mood that people are being taken by surprise, by the bounce in oil, copper, or iron ore prices. All have seen extremely sharp falls in recent months - and big falls since prices peaked - and they could bounce a fair bit more without telling us much about longer term trends. A 50% retracement of the fall in oil prices takes WTI to 75, while copper prices may be testing the upper end of the post-2011 downtrend, but they have retraced less than a quarter of that fall.”
Key Quotes
“Weak Chinese data were not a surprise after the weekend policy move (IP +5.9% y/y, retail sales +10%y/y, capex + 12%y/y) but confirm that the economic slowdown continues. For how long can markets be comforted by PBoC easing against this backdrop?”
“Equity markets are stronger across Asia but while nothing is happening in AUD/USD or NZD/USD, we remain medium-term bearish of both. The bounce in commodity prices is helping calm markets but the Chinese slowdown will continue to act as an anchor.”
“It rather sums up the current market mood that people are being taken by surprise, by the bounce in oil, copper, or iron ore prices. All have seen extremely sharp falls in recent months - and big falls since prices peaked - and they could bounce a fair bit more without telling us much about longer term trends. A 50% retracement of the fall in oil prices takes WTI to 75, while copper prices may be testing the upper end of the post-2011 downtrend, but they have retraced less than a quarter of that fall.”