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Risk-on flows seen after Chinese data

11:28 12 April 2019

Summary:

  • Pound little changed on the week despite Brexit news
  • Stocks and Oil gain after China expands credit
  • FTSE closes in on 2019 highs 

There’s been a clear move higher in risk assets in recent trade after the release of some data from the Far East suggests that China continues to provide ample levels of stimulus to its economy. The FTSE has added over 30 points this morning to trade back near last week’s close and the market appears well set to add to this going forward and push up to trade at 2019 highs. As the dust settles on another week dominated by Brexit headlines that has resulted in nothing changing other than the can being kicked further down the road, the pound is little changed on the whole. Any upside benefits gained in avoiding a no-deal have been mitigated by the heightened levels of uncertainty being prolonged further and until something tangible changes on this front there’s little to suggest any chance of significant appreciation in the pound.

The pound is little changed at the end of yet another tumultuous week for Brexit. Source; xStation

 

Stocks and Oil jump as China expands credit

The March M2 money supply rose by 8.6% Y/Y vs 8.2% expected while new yuan loans came in at 1.69B vs 1.20B expected. Compared to levels seen in recent years these figures aren’t actually that elevated, but they do represent a pick-up compared to the latest numbers and suggest the world’s second largest economy is scaling back on its deleveraging efforts in a bid to bolster growth. In itself this data could be described as only mildly supportive of risk assets but the clear positive market reaction reveals how both equities and crude oil retain a heightened sensitivity to good news at present, while looking through any negatives - a pleasing scenario for Bulls.   

The UK100.cash has moved higher today, helped by the news from China and the market is trading back near its highest level of the year. The 78.6% fib at 7613 could now be in the the crosshairs of Bulls while the 61.8% at 7383 may be seen as possible support. Source: xStation

 

 

This content has been created by X-Trade Brokers Dom Maklerski S.A. This service is provided by X-Trade Brokers Dom Maklerski S.A. (X-Trade Brokers Brokerage House joint-stock company), with its registered office in Warsaw, at Ogrodowa 58, 00-876 Warsaw, Poland, entered in the register of entrepreneurs of the National Court Register (Krajowy Rejestr Sądowy) conducted by District Court for the Capital City of Warsaw, XII Commercial Division of the National Court Register under KRS number 0000217580, REGON number 015803782 and Tax Identification Number (NIP) 527-24-43-955, with the fully paid up share capital in the amount of PLN 5.869.181,75. X-Trade Brokers Dom Maklerski S.A. conducts brokerage activities on the basis of the license granted by Polish Securities and Exchange Commission on 8th November 2005 No. DDM-M-4021-57-1/2005 and is supervised by Polish Supervision Authority.

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CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 77% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 77% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

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