Big Trouble In Little China

The Asian stocks and commodities continue plummeting with the Q1 Gross Domestic Product report in China falling below investor expectation. This was a further blow to the markets that were already suffering from the disappointing US retail and consumer data releases on Friday.

GDP in China, the 2nd largest global economy gained 7.7 per cent for the first quarter of 2013 since the same time last year. While this does represent an increase it is still beneath analyst expectation of 8 per cent. Another release which fell below forecast was industrial production figures in China which gained 8.9 per cent in March but still fell short of the 10 per cent expectation. Bad data all round in China with even retail sales disappointing analysts; the figure added 12.4 per cent for the first quarter yet was 2.4 per cent below the figure for the same period last year.

All of this weak data pushed harder against already negative market sentiment over fears for economic growth. This data along with the weak US data as discussed in the weekly analysis has sent analysts running to the safety of the USD.

Stocks

Asian Stocks all lower on back of China’s data releases. The Japanese Nikkei 225 dropped 0.87 per cent after rebounding slightly from its -1.21 per cent decline. The Hang Seng in Hong Kong lost 1.37per cent and the Shanghai Composite fell 0.64 per cent. The Australian S&P/ASX 200 lost 0.97 per cent as the drop in the commodities plus the fact that China and Australian are the biggest trading partners hit the Australian market.

Forex

In Asian overnight trading the USD was still the asset of choice for many investors looking to escape the tumbling commodity markets and falling stocks. The EUR/USD pair drooped by 0.25 per cent while the British pound against the dollar lost 0.1 per cent. The USD gained heavily against the AUD (-0.55per cent) and the CAD (-0.50 per cent) which are both currencies firmly linked to the commodities.

Commodities

Investors carried on shedding their positions in the commodities with gold losing 3.19 per cent, silver losing 599 per cent. Crude oil was down 2.55 per cent with the announcement of the Venezuelan election results. Caprilles who is the more capitalistic choice lost to Maduro who models himself politically in the model of Chavez.

Today

Not much on the economic calendar today except the trade balances in Europe. Still expect a lot of market volatility with lots of activity for binary options traders.