Chinese GDP as Expected

The major news of the morning has been the Chinese GDP but it was largely on expected lines as it came in at +6.7 y/y which was the same value as that was expected. The industrial production did show a dip by about 0.3% from the expected value but this was largely ignored by the market. The market would have let out a huge sigh of relief as the Chinese economy has been of concern of late and also has been considered as a risk to the markets along with Brexit and the Presidential elections in the US.

This morning, like yesterday, has been dominated by general USD weakness all around which has helped the pound higher towards 1.2300 and is now sitting at the range highs as we write this. There has also been progress in the prices of commodities and oil as well and this has all been due to the fact that there has been a general risk on sentiment in the markets. This has led the stock markets higher and also has led to the USD weakness as the money moves from stable assets like the USD to the riskier assets like the stock markets.

Looking ahead today, though there are some economic data to be released from the UK and US, we do not expect them to be major market movers. We also expect the USD weakness to continue atleast for a day or two and this should help fast movers like the AUD and the NZD while the yen seems to be caught in a tight consolidation range as of now. The most volatile pair has been the GBPUSD which has gone from strength to strength since yesterday morning and now sits at a crucial resistance region. Expect some tight ranging trading for the day as the markets await the next direction.
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