Chinese data that is more or less as good as the market expects is enough for a rally these days, such is the level of negativity and fear surrounding the world’s second largest economy.
Growth in Q2 came in at 7.5%, down from the 7.7% the country managed to kick out in Q1. 7.5% is the government mandated growth target and you would have to think that the government will now be increasingly called upon to support the economy should further knocks come along. The government is reluctant to do this on the basis that they believe stimulus will stoke inflation in country and could go further to increasing the chance of asset price bubbles.
The main beneficiary of the news was the AUD, up 0.63% against the USD on the day at the time of writing. The Aussie dollar moved to the lowest level since mid-2010 last week as fears over China and the slips in worldwide commodity markets gave investors in Australian mining operations cause for concern.
Friday saw the ratings agency Fitch finally bite the bullet and downgrade the French sovereign rating to AA+. This now puts all the ratings agencies at one notch below AAA. Fitch blamed the lack of a resolution to budget deficit issues alongside the 10.8% unemployment rate as reasons for this downgrade. Euro was largely ambivalent to the move however, given that this should have happened last year. There will be some ripple effects of course; French banks will be under further pressure on the likelihood that the state will find it more challenging to bail them out should they get into further difficulty.
Apart from the aforementioned AUD move, currencies have remained quiet since the move lower in the USD index following Ben Bernanke’s comments around the tapering of Fed asset purchases on Wednesday and the disappointing initial jobless claims on Thursday afternoon.
The data calendar is jam packed this week with tier 1 releases that will give us an up-to-date look as to how Q2 finished for the world’s economy. Today’s advance retail sales from the US should see a nice 0.8% rise in sales following a strong demand for car purchases in recent weeks despite recent tax increases.
The euro is likely to be governed by continual fear over the state of the political process in Spain and Portugal. Spain’s PM Mariano Rajoy, is facing increased calls to resign following publication of text messages between him and the man at the centre of a payments scandal. Payments were supposedly made to Rajoy from a slush fund governed by the treasurer of his political party, the Partido Popular.
Growth in Q2 came in at 7.5%, down from the 7.7% the country managed to kick out in Q1. 7.5% is the government mandated growth target and you would have to think that the government will now be increasingly called upon to support the economy should further knocks come along. The government is reluctant to do this on the basis that they believe stimulus will stoke inflation in country and could go further to increasing the chance of asset price bubbles.
The main beneficiary of the news was the AUD, up 0.63% against the USD on the day at the time of writing. The Aussie dollar moved to the lowest level since mid-2010 last week as fears over China and the slips in worldwide commodity markets gave investors in Australian mining operations cause for concern.
Friday saw the ratings agency Fitch finally bite the bullet and downgrade the French sovereign rating to AA+. This now puts all the ratings agencies at one notch below AAA. Fitch blamed the lack of a resolution to budget deficit issues alongside the 10.8% unemployment rate as reasons for this downgrade. Euro was largely ambivalent to the move however, given that this should have happened last year. There will be some ripple effects of course; French banks will be under further pressure on the likelihood that the state will find it more challenging to bail them out should they get into further difficulty.
Apart from the aforementioned AUD move, currencies have remained quiet since the move lower in the USD index following Ben Bernanke’s comments around the tapering of Fed asset purchases on Wednesday and the disappointing initial jobless claims on Thursday afternoon.
The data calendar is jam packed this week with tier 1 releases that will give us an up-to-date look as to how Q2 finished for the world’s economy. Today’s advance retail sales from the US should see a nice 0.8% rise in sales following a strong demand for car purchases in recent weeks despite recent tax increases.
The euro is likely to be governed by continual fear over the state of the political process in Spain and Portugal. Spain’s PM Mariano Rajoy, is facing increased calls to resign following publication of text messages between him and the man at the centre of a payments scandal. Payments were supposedly made to Rajoy from a slush fund governed by the treasurer of his political party, the Partido Popular.