Spreadex Market Update

Chinese inflation slows



News that Chinese inflation had slowed more than originally forecast has helped mining constituents in the FTSE 100 drive the index higher going into the U.S. open.

This unexpected fall in inflation reduces pressure on Chinese policy makers to tighten credit. We are also starting to see the benefits of the Bank of Japan’s newly announced stimulus measures after the yen’s rebound took it to the brink of 100 per dollar for the first time since 2009.

European markets are broadly trading higher helped by a good start to the U.S. corporate earnings season. U.S. Aluminium group Alcoa got the preceding underway by unveiling higher-than-expected profits after Wall Street's closing bell on Monday, easing concerns about corporate results.

Ben Bernanke has revealed plans put in place by the Fed to curb the liquidity risk of banks. The Fed wants to achieve this by pushing financial companies to better manage liquidity risk and reduce reliance on wholesale funding. This is of course an effort to minimize the odds of another taxpayer bailout following the 2008-2009 financial crisis.

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