A lot has happened during the third week of the year. The economic calendar of this week has been very busy of events that moved quickly European, American and Asian stock markets.
Let’s start from China, where earlier this week, as already mentioned in the previous article, was published the data on GDP, industrial production and retail sales.
These sensitive data were long overdue, since the Chinese economy started to show signs of slowing down, as a demonstration of his actual state of health.
The growth of China’s GDP was 6.8% against 6.9% of last year, while on a quarterly basis; growth was 1.6% against expectations of 1.7%.
Industrial production in December rose by 5.9%, resulting slightly lower than expected which saw a growth of 6%. On an annual basis, industrial production rose by 6.1%.
Retail sales rose more slowly than expected, growing by 11.1% against a consensus of + 11.3%. Investments in fixed capital sector showed an increase of 10% compared with a forecast of 10.2%.
The publication of data have driven rising almost all Asian indices in a session dominated by volatility and have helped to close the session of China soaring.
We have already had occasion to deepen what is happening to the Chinese economy in 2016, but the question that persists in the minds of analysts is always the same: ‘we have to really trust the statistics published by the most powerful country of Asia?’
The rise Tuesday unfortunately it was not enough because due to the fall in oil prices thanks to return to the track of Iran, the Asian stock exchanges collapsed again.
China has resisted more than others, losing less than the rest of the major Asian markets. The investors are hoping for a new monetary stimulus by the PBoC.
What we need to worry more at the moment it is oil that is moving below 30 dollars a barrel. The chairman of Aramco, the national oil company of Saudi Arabia (number one in the world for oil production), has described the collapse of oil as “irrational” and expects the oil market will rebound in 2016, although the country will continue to maintain a high production.
The increased supply in the United States, producers of shale oil in the last five years has helped create a global oversupply which triggered a depreciation of the black gold of 75% in 18 months.
The sell-off of the oil has been gradually accelerating this year, due to the return on the market of Iran which is the main rival of Saudi Arabia in the Middle East region.
The low oil prices, however, are creating more of a problem to other OPEC members. Saudi Arabia in this regard has not closed the door and said it would consider a cut in production only if other OPEC members will do the same as other major producers outside of the ‘organization’ such as Russia.
The second important event of the week was ECB meeting and press conference. Interest rates were left unchanged at 0.05% and President Draghi reassured about Italian banks and the economy of Eurozone.
The ECB meeting gave a good boost to the euro-dollar exchange and to all cross currency o Eeurozone, so the major tours in terms of pips were recorded elsewhere.