Spreadex Market Update
Risk Rally Continues Despite Lower China GDP Forecast
Equities On the Up
Equities prices appear to have shrugged off the recent increase in yields with most indices seen in the green across the European open on Monday. The S&P remains in the green, following on from Friday’s almost 2% gain. Over the weekend, the Chinese government was seen setting a full-year GDP target of 5%, which was a little below the 5.5% - 6% the market was looking for. The forecast suggests the government is planning less stimulus this year as it instead focuses on stability. Despite the lower target, risk appetite looks to holding firm for now.
FTSE Holding Back
Despite the broader gains seen in equities markets, the FTSE is having a more muted start to the week, down around 1% as of writing, weighed on by a stronger Pound. European traders will be focusing on today’s January eurozone retail figures for the latest glimpse into the health of the overall economy there.
CHF Rallies on Fresh CPI Beat
The Swiss franc has roared back into action this week. A fresh uptick in CPI, as shown by data this morning, has once again sharpened the focus on hawkish SNB expectations, fuelling a flood of demand for the currency. CHF has been strong across the board though gains have been most pronounced against USD and NZD which have been the two weakest currencies today. NZD looks to be losing ground amidst concerns that the RBA might take a more hawkish tone at tomorrow’s RBA meeting.
Metals Climb Higher – Crude Pauses
In the metals and commodities space, both gold and silver are seeing decent buying across the European open on Monday. Both metals are extending last week’s gains, capitalising on a softer USD tone for now. Crude prices are looking a little softer at the open today following a decent upside move last week, headline by the rally on Friday. Traders have perhaps been left a little disappointed by the modest growth target set out in China, wondering what that means for the oil demand outlook this year.
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