Investors on the Sidelines Ahead of the Long Weekend

The rebound in China’s economy did little to excite investors despite GDP, retail sales, industrial production, and fixed asset investments all showing signs of improvement.
Hussein Sayed
relaxing trader

Equity markets moved in different directions yesterday, as positive Chinese data failed to boost risk appetite. The S&P 500 slipped 0.23% on Wednesday, dragged down by the healthcare industry which fell 2.86% on concerns over possible changes to the US healthcare system, including calls for lower drug prices. However, European markets stood at a near six-month high, with auto and banking stocks leading the rally.

Asian equities followed Wall Street lower today, with only the Jakarta Stock Exchange moving against the trend on early, unofficial “quick count” results indicating that President Joko Widodo is on course to win a second term. , the official results will only be announced on May 22.

Open your FXTM account today

The rebound in China’s economy did little to excite investors despite GDP, retail sales, industrial production, and fixed asset investments all showing signs of improvement. It’s difficult to justify why the positive data hasn’t translated into higher equities but it could be for two reasons; the expansion in economic activity was not led by the private sector, suggesting that it may not be sustainable in the longer term. Additionally, the lower likelihood of further aggressive monetary stimulus being implemented is another reason why investors will have refrained from taking on more risk. That’s why a trade agreement is becoming a necessity for equities to take another leg higher.

Better-than-expected job numbers out of Australia have sent the Australian Dollar 0.4% higher, but that was not enough to break above the key resistance level of 0.72. The Australian economy added 25,700 jobs in March, more than double the expected figure of 12,000. Unemployment ticked slightly higher to 5% from 4.9%, but with good reason, as more people joined the labor force to look for jobs. More encouraging is that jobs were dominated by full-time roles, suggesting better quality jobs. The positive report will give the RBA more time to decide on whether it should lower interest rates; if inflation figures next week also surprise to the upside, the chance of AUDUSD rallying beyond 0.72 becomes highly likely.

In Europe, investors will turn their attention to the latest batch of PMI reports before they head into the Easter holidays. If it’s true that the global economy has started to stabilize, we will need to see this reflected in today’s release.

Disclaimer: The content in this article comprises personal opinions and should not be construed as containing personal and/or other investment advice and/or an offer of and/or solicitation for any transactions in financial instruments and/or a guarantee and/or prediction of future performance. ForexTime (FXTM), its affiliates, agents, directors, officers or employees do not guarantee the accuracy, validity, timeliness or completeness, of any information or data made available and assume no liability as to any loss arising from any investment based on the same.

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