China Keeps Investors Cautious

Asian markets were very cautious as investors are waiting on the Chinese officials to release the latest round of growth data slated for next week. This quiet die offset gains from Wall Street’s record breaking rally overnight.

Investors are beginning to shift from the fear of when the Fed will roll back stimulus to the expectation that China will handle their slowdown with structural changes. Overnight the DJIA surged higher along with the S&P 500 to new record highs on the heels of dovish comments made my Ben Bernanke, the Fed Reserve Chief.

Heading into next week, investors will be watching any and all numbers released by China as well as comments made by China’s Premier Li Keqiang.

STOCKS
The Nikkei as well as the Australian benchmark, S&P/ASX, retreated from their multi- year highs. Both the Kospi, in South Korea, and the Shanghai Composite each lost 0.50 percent today.

European markets are expected to open higher today as the FTSE futures are up 1 point, the DAX is seen up 20 points and the CAC is seen up 3 points.

CURRENCIES
The AUD/USD (see below chart) continues its wild post QE2 statement ride since the comments made by Bernanke and Co. The Ozzie has been erratic to say the least . Yesterday the Aussie opened at 0.9297, spiked all over the place then, despite surprising Aussie unemployment numbers which came in at 10.3K, sending the Aussie to 0.9300, it retreated to settled at 0.9200.
AUD/USD" width="645" height="387">
The EUR/USD is staying firm near 1.3100. Yesterday, the market fell from 1.3210 to 1.3003 closing at 1.3093. Right now the Euro is trading quietly as investors wait on China’s data.

COMMODITIES
Brent crude is trading steadily below $108 after falling from a 3 month high hit yesterday. The commodity retreated as OPEC is pondering capping supply and waning demand from China as their growth slows. Still, we have tensions in Egypt which could help to prop up price going forward.

Gold has eased a bit but is still headed towards a strong weekly close not seen in 2 years. This comes as investor fears about the roll back of the U.S. monetary stimulus eases.

TODAY’S OUTLOOK
Portugal’s government has delayed its next review of the country’s bailout due to the tense “current political situation.” Earlier this week, the president of the country rejected any reshuffling of the ruling coalition. This adds fuel to an already burning fire that began after two ministers resigned last week.

The Euro zone will release industrial production numbers while the U.S. will release the Produce Price Index and Consumer Sentiment figures.