Chinese data weakens global markets... $50 oil weighed by analysts... Gold bullion is gaining...
Chinese data weakens global markets
Global stock markets have been hit by some more weak data from China. Trade figures showed a 25.4 per cent drop in exports in US dollar terms while imports were down 13.8 per cent. The drop was larger than expected and Reuters says it was the largest since 2009.
Shanghai managed slim gains for equities on expectation of stimulus but most Asian markets closed with losses.
The poor sentiment has spread to Europe with major indexes all trading with losses so far this morning. The ECB will be meeting this week.
Wall Street and Toronto are not expected to escape the doom with both set to open lower after gains in the previous session.
$50 oil weighed by analysts
It was only a few weeks ago that analysts were talking of a $20 or even $10 barrel but now there are talks of $50. The recent rally may not be a definite sign of prolonged recovery but with OPEC and other producers talking about stabilization measures things are at least looking more positive. Oil industry consultancy PIRA says that the Latin American producers are looking at $50, the figure also considered now by Morgan Stanley and RBC Capital Markets. The figure is seen as the minimum level to avoid severe credit issues for many producing nations.
Gold bullion is gaining
The criticism of Canada’s decision to sell off almost every ounce of gold reserves is only likely to intensify as prices increase. Michael Howell of Cross Border Capital says that under-pressure liquidity is fuelling the interest in bullion, with prices potentially reaching U$2000 per ounce by mid-2017. In an article for CityAM.com Howell says that central bank liquidity in the US is set to fall which will boost demand for gold bullion.
Global stock markets have been hit by some more weak data from China. Trade figures showed a 25.4 per cent drop in exports in US dollar terms while imports were down 13.8 per cent. The drop was larger than expected and Reuters says it was the largest since 2009.
Shanghai managed slim gains for equities on expectation of stimulus but most Asian markets closed with losses.
The poor sentiment has spread to Europe with major indexes all trading with losses so far this morning. The ECB will be meeting this week.
Wall Street and Toronto are not expected to escape the doom with both set to open lower after gains in the previous session.
| Latest | 1 month ago | 1 year ago | |
| North America (previous session) |
|||
| US Dow Jones | 17,073.95 (+0.40 per cent) | +6.53 per cent | -4.38 per cent |
| TSX Composite | 13,383.60 (+1.29 per cent) | +6.77 per cent | -10.49 per cent |
| Europe (at 5.30am ET) |
|||
| UK FTSE | 6,130.51 (-0.84 per cent) | +7.75 per cent | -11.30 per cent |
| German DAX | 9,645.87 (-1.36 per cent) | +7.42 per cent | -16.49 per cent |
| Asia (at close) |
|||
| China CSI 300 | 3,107.67 (+0.09 per cent) | +4.85 per cent | -10.66 per cent |
| Japan Nikkei | 16,783.15 (-0.76 per cent) | -1.30 per cent | -11.53 per cent |
| Other Data (at 6.30am ET) |
|||
| Oil (Brent) | Oil (WTI) | Gold | Can. Dollar |
| 40.62 (-0.54 per cent) |
37.57 (-0.87 per cent) |
1275.40 (+0.90 per cent) |
U$0.7494 |
| Aus. Dollar |
|||
| U$0.7436 | |||
$50 oil weighed by analysts
It was only a few weeks ago that analysts were talking of a $20 or even $10 barrel but now there are talks of $50. The recent rally may not be a definite sign of prolonged recovery but with OPEC and other producers talking about stabilization measures things are at least looking more positive. Oil industry consultancy PIRA says that the Latin American producers are looking at $50, the figure also considered now by Morgan Stanley and RBC Capital Markets. The figure is seen as the minimum level to avoid severe credit issues for many producing nations.
Gold bullion is gaining
The criticism of Canada’s decision to sell off almost every ounce of gold reserves is only likely to intensify as prices increase. Michael Howell of Cross Border Capital says that under-pressure liquidity is fuelling the interest in bullion, with prices potentially reaching U$2000 per ounce by mid-2017. In an article for CityAM.com Howell says that central bank liquidity in the US is set to fall which will boost demand for gold bullion.
