It’s the start of a new week and everyone’s hoping it will be better than the last one. For anyone looking for the catalyst behind last week’s meltdown, it is important to keep in mind that the recent concern on markets goes back much further, originating in China, particularly with regard to slowing growth from that country. It therefore appears logical that any reassurance must also originate in the same place. For the time being, Beijing has been slow to put forth a stimulus plan, but considering its legendary iron grip on the economic reins of the country, there’s no doubt that such a plan isn’t far off. For the time being, the People’s Bank of China has limited its actions to pegging the value of the yuan against the greenback at its lowest level in three months this morning. Adding to the country’s economic concerns, Chinese exports for January declined for the seventh straight month, plunging an 11.2% y/y, while imports fell by 18.8%. Together, these worse-than-anticipated results produced a record trade surplus of $63.3 billion U.S. Markets are closed south of the border for Presidents’ Day and Canadian markets are also closed for the Ontario Family Day holiday. Don’t worry though, your faithful traders are still at their posts today, as currencies don’t take holidays. Have a great day! Stéphane Goulet
