Global Times Tweets Support Market Hopes

Asian markets are growing in the hope of stimulus, while Europe and the US are waiting for signals from the central banks. China continues to struggle for economic growth, as it aims to resist the effect of trade disputes with the U.S.
Alexander Kuptsikevich
Currencies

The editor of an influential Chinese newspaper revealed that national incentives were being prepared in order to support economic growth both inside and outside the country.

Meanwhile, Germany’s finance minister promised impressive incentives in the event of an economic crisis. In addition, the risks of Britain’s exit without a deal are being reduced. All these promises prove to be an important contributing factor towards market dynamics.

Positive background since the beginning of the month returned the demand for stocks to the markets and reduced the demand for protective assets, including long-term government bonds of developed countries and gold. But there is a striking rotation in the markets for high-tech equities, tied to the start of the new fiscal year.

However, it is worth noting that the major U.S. indices have changed little over the previous three trading sessions. This represents a worrying sign that new money is not forthcoming – at least until governments launch new measures and central banks start a fresh round of easing.

The currency market, as an indicator of investor sentiment, demonstrates the belief in the success of China’s stimulus measures – seen in the growth of AUDUSD by 2.8% in just over a week.

The Japanese yen lost 2% during these days, also reflecting the increase in demand for stocks and lower demand for protective government bonds. The CNY is gaining ground, which is also a reflection of increased local optimism.

At the same time, the EURUSD pair froze at levels just above 1.1000 in anticipation of new signals from the ECB on Thursday. It is an important signal, illustrating that most players still view the current situation as an opportunity to choose the signals of a further trend. Therefore, the situation in the Asia-Pacific currencies may change in the coming days, despite the positive dynamics that have been in place since the beginning of the month.

Furthermore, it should not be forgotten that the trade conflicts have seriously eroded economic growth, which can be seen in the fading rates of employment growth in the U.S. and the close recession in Germany. At the same time, the trade disputes remain unresolved, preserving the risks that currently hang over the markets.

Thus, one should be very cautious about the current growth trend in Asia, as it may reverse at any time if governments and regulators fail to meet market expectations.

This article was written by FxPro

Don't miss a thing!

Discover what's moving the markets. Sign up for a daily update delivered to your inbox

Latest Articles

See All

Expand Your Knowledge

See All

Top Promotions

Top Brokers

IMPORTANT DISCLAIMERS
The content provided on the website includes general news and publications, our personal analysis and opinions, and contents provided by third parties, which are intended for educational and research purposes only. It does not constitute, and should not be read as, any recommendation or advice to take any action whatsoever, including to make any investment or buy any product. When making any financial decision, you should perform your own due diligence checks, apply your own discretion and consult your competent advisors. The content of the website is not personally directed to you, and we does not take into account your financial situation or needs.The information contained in this website is not necessarily provided in real-time nor is it necessarily accurate. Prices provided herein may be provided by market makers and not by exchanges.Any trading or other financial decision you make shall be at your full responsibility, and you must not rely on any information provided through the website. FX Empire does not provide any warranty regarding any of the information contained in the website, and shall bear no responsibility for any trading losses you might incur as a result of using any information contained in the website.The website may include advertisements and other promotional contents, and FX Empire may receive compensation from third parties in connection with the content. FX Empire does not endorse any third party or recommends using any third party's services, and does not assume responsibility for your use of any such third party's website or services.FX Empire and its employees, officers, subsidiaries and associates, are not liable nor shall they be held liable for any loss or damage resulting from your use of the website or reliance on the information provided on this website.
RISK DISCLAIMER
This website includes information about cryptocurrencies, contracts for difference (CFDs) and other financial instruments, and about brokers, exchanges and other entities trading in such instruments. Both cryptocurrencies and CFDs are complex instruments and come with a high risk of losing money. You should carefully consider whether you understand how these instruments work and whether you can afford to take the high risk of losing your money.FX Empire encourages you to perform your own research before making any investment decision, and to avoid investing in any financial instrument which you do not fully understand how it works and what are the risks involved.
FOLLOW US