Chinese data fails to energise markets

Chinese data fails to energise markets

By Tim Waterer (Senior Trader, CMC Markets)

Financial markets across Asia today failed to be energised by the Chinese Trade Balance data despite there being some positive signs. Prior to the weekend release, had you said that Chinese Exports would be near double the amount forecast (year on year), traders would have gladly taken this result. However, once again the market’s over-reliance on stimulus is on display, with the good Chinese data result doused by lowered expectations of further PBoC easing measures, which explains the largely unmoved market response.

The Australian Dollar (AUD) started out the day on the front foot courtesy of the weekend Chinese data however the foray above 1.0250 was short lived with traders again turning cautious ahead of further US Corporate Earnings due. A decline in commodity prices such as gold and oil appear to have blunted the AUD’s performance to start the week. It appeared today that traders were not exactly falling over themselves to jump into higher yielding assets with still so many question marks over Spain which is muddying the outlook over coming months for Europe.

The Australian sharemarket traded in rudderless fashion to start the week, with investors showing surprising indifference to the Chinese data. Commodity price weakness weighed on the key mining stocks which contributed to an overall lethargic performance of the local index. On Tuesday, the release of RBA Monetary Policy Minutes will be closely scrutinised with a view to potentially more interest rate action on the first Tuesday of November.

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