Worries On China Outweigh Surprising US Data

Surprising figures to come out of the world’s largest economic market – the US. Retail spending was up in February by 1.1per cent from January with consumers seemingly ignoring the tax raises. Investors had factored in tax increases from payroll into their expectations for January and believed that this would impact spending negatively. In the US where consumption costs make up 70 per cent of the economy there, it is now expected that the economy will grow in 2013 by 2per cent.

Meanwhile in the world’s second largest economy China it’s another story. Stocks were trading lower in the Asian overnight session as news that China will step up its measures to stabilize the housing markets even while Mortgage rates were increased in Hong Kong.

Stocks Technical Analysis

Asian Stocks
Asian stocks were mostly lower in Asian session, over fears for China’s outlook put pressure on the stocks. The Hang Seng which hit 3 month lows during the trading session, closed down slightly by 0.2 per cent. The property companies really dragged the Hang Seng down. The Australian ASX 200 closed down 1.2 per cent even after stronger than expected jobs data. It was shown that Australia had added 71,500 jobs last month which was the biggest gain in over ten years and it knocked over expectations of only 9000 jobs to be added. The Nikkei 225 ended up 1.2 per cent after Haruhiko Kuroda the nominated Governor of central Bank was approved by the lower house.

European Stocks
European stocks were higher this morning in advance of a 2 day summit meeting in Belgium on economic matters. The leaders will discuss plans for a Cypriot bailout and budget structure plans. The EURO STOXX 50 was up 0.8 per cent, French CAC 40 gained 0.65 per cent and the German DAX 30 moved up 0.8 per cent.

US Stocks
DJIA closed at another fresh high on Wednesday after strong retail sales data. The Dow Jones closed up 0.04 per cent, S&P 500 gained 0.13 per cent and the NASDAQ was up 0.09 per cent.
Forex Technical Analysis

USD was up against the JPY this morning boosted on the one hand by anticipation that Japan will take further easing measures and by the optimistic US economic outlook on the other hand. The USD/JPY touched 96.41 in European session this morning. The JPY was also down against the EUR with the EUR/JPY pair gaining 0.25 per cent to touch 124.90.

EUR held firm at its lowest level in almost 3 months against the USD in Asian trading as concerns abound as the economic health in the Eurozone. EURUSD pair touched 1.2924 in overnight trading. NZD also held its ground against the USD today after the interest rate of 2.50 per cent remained unchanged. NZD/USD touched 0.8202.

Commodities Techincal Analysis
Little movement with gold ahead of the EU Summit as investors remain inactive. Gold trading at $1587.40 troy ounce for April delivery. Crude oil trading slightly lower in Asian session today after better than expected inventory report yesterday. The report showed that oil inventories were up by 2.624 barrels last week which although down from the week before still surpassed expectation of 2.338 million barrels. Crude for April delivery was trading at $92.25 . Not so for natural gas, with rumors of inventory numbers down. Also forecasts of cold weather pushing up cost. April delivery o f antural as trading at $3.687 Btmu a gain of 1.14 per cent.

Today’s outlook
Spanish Government Bond auction later today which will affect the euro as well as Spanish retail sales. Also the US releases on PPI and jobless claims. The European Central Bank report and EUR employment figures.