15.32 AEDT, Monday 10 December 2012
Chinese data helps sustain momentum
By Tim Waterer (Senior Trader, CMC Markets)
While the fiscal cliff discussions are still offering no joy for investors, better US jobs market data as well as upbeat
Chinese indicators are helping to sustain the forward momentum of financial markets despite the standoff in Washington.
Chinese economic indicators have definitely been ‘coming to the party’ of late and this is helping offset the
uncertainty pertaining to the US budget talks. The evidence is beginning to mount that the Chinese economy has turned
the corner, a situation which is supportive of traders entertaining the idea of having higher yielding assets in their
portfolios.
Rosier looking Chinese economic data has been supportive of the Australian Dollar with the currency again within
striking distance of the 1.05 level. However, Chinese trade balance data today did miss the mark which saw the AUD give
up some ground against the USD. The AUD slipped around 20 pips from 1.0485 to 1.0465 on the release.
While the Chinese trade balance data did miss the mark to the low side, on balance the signs have been positive from the
world’s second biggest economy and todays result should do little to deflate investor confidence that things are indeed
picking up.
Resource stocks on the Australian market were particularly responsive to the better looking US and Chinese economic
indicators, with RIO among the standout performers on the local bourse to start the week. The lower print on the Chinese
trade balance data did little to upset the momentum today of the Materials sector, with investors preferring to focus on
the broader uptrend in Chinese economic indicators.
ends