Category: Fundamental Analysis

Policy Bias in China: Fighting with Credit Leverage or Adding more Stimulus?

A key gauge of the debt burden in Chinese economy exceeded 300% of GDP, the Institute of International Finance reported. Beijing was forced to maintain the trajectory of undesirable debt growth, increasing monetary and fiscal support in response to shocks in foreign trade, weakening foreign demand and activity in production and services sectors. Big tax cuts and following decline in...

Carry Trade Flows May Gain Momentum as China Finds Path to Recovery

An upbeat surprise in Chinese economic data for June provided a very limited “quota” for the growing market concerns this week. A pickup in macroindicators across the board, such as industrial production output, consumer spending and investment in fixed assets, should reduce the overall degree of nervousness regarding trade headlines. With negative economic consequences arising from tariffs, China’s ability to...

Key economic events and reports of this week

Monday, July 15, 2019 – GDP (YoY) (Q2)(CNY), Industrial Production (YoY) (Jun)(CNY), CPI (QoQ) (Q2)(NZD). Tuesday, July 16, 2019 – RBA Meeting Minutes (AUD), Average Earnings Index +Bonus (May)(GBP), Claimant Count Change (Jun)(GBP), German ZEW Economic Sentiment (Jul)(EUR), Core Retail Sales (MoM) (Jun)(USD), Retail Sales (MoM) (Jun)(USD). Wednesday, July 17, 2019 – CPI (YoY) (Jun)(GBP), CPI (YoY) (Jun)(EUR), Building Permits...

US jobs, CPI data can’t stop the rate cut as the policymakers focus on pre-emptive measures

Friday intraday returns of the Asian shares swayed around zero as Powell comments on Thursday delivered chilling influence on risk assets and was basically spent, investors turned their focus on Chinese trade and money aggregates data while fresh Trump threats to impose sanctions against China could start to override Powell’s optimism. Chinese exports are expected to post contraction in June...

Uber-dovish Powell gives green light for rumors about 50 bp rate cut

Gradual deterioration of consumer and corporate confidence as an aftermath of the trade standoff becomes the central theme of the Fed’s argument in favour of fresh round of monetary stimulus, for the first time in a decade. It became clear from yesterday’s Powell’s speech that macroeconomic data should be temporarily sidelined (as can be concluded from Powell’s quite restrained acknowledgement...

European Commission Lowers Growth Forecasts, but Euro is Hungry for Stimulus News

The European Commission has downgraded its outlook for the pace of economic expansion in the Eurozone next year, saying that US efforts to overhaul the global trade order poses the greatest risk to the economy. Adjustments of economic forecasts in the EU can lead to appropriate easing in terms of fiscal discipline, i.e., an increase in government spending, tax cuts...

AUDUSD: Wedge widening the Resistance levels.

The last U-turn of AUDUSD from 0.6865/60 is not only a horizontal line about 0.6965 but a long five-week descending resistance line about.6975 more likely to please buyers than one horizontal line. In cases where bulls refrain from 0.6975 their favorites could be 0.7000 and 0.7050/55 in advance of the 0.7100, 0.7140 and 0.7205 successive numbers northward. Downside, the pair’s adjacent drops...