Morning Markets: China growth beats forecasts
- US: Unemployment Insurance Weekly Claims Report (13:30 GMT)
- US: New Residential Construction (13:30 GMT)
- US: EIA Weekly Petroleum Report (16:00 GMT)
China has surprised markets this morning with a raft of stronger-than-expected economic indicators including a GDP expansion for the whole of 2017 of 6.9%, ahead of the official forecast of "around 6.5%" and the market's expectation of 6.7% growth. The news comes against a backdrop of intensified efforts by Chinese authorities to curb environmentally-hazardous manufacturing and rein in over-indebted companies. There was also talk earlier this week that whatever headline finally emerged that it would not be a true reflection of economic momentum on the basis that earlier quarterly accounts had been manipulated to understate the strength of the economy. Whatever, the figure we've got is 6.9% and that's what markets will address today.
Elsewhere, Bitcoin continues to tumble and has now fallen beneath $10,000 as speculators fret about the sustainability of what many regard as a Ponzi scheme. The cryptocurrency phenomenon has even crept into the the standard equity lexicon, with the recent superpowered rise in the Dow being described as "Bitcoin-like". Having touched a new all-time high above 26,000 yesterday, the index closed firmly above this watershed last night, having only breached the 25,000 mark on January 4.
Most Asian markets gained ground today, thanks to Wednesday's rally in Wall St. The upbeat news from Beijing which was released late in the Asian trading day (at 07:00 GMT) helped as well.
- An earnings-sparked rally on Wall St on Wednesday pushed the Dow back above 26,000
- Most key Asian markets gained ground, tracking the strong lead from Wall St
- The Hang Seng rebounded from a slide; it was up 0.40% to 32,112.11 at 0700 GMT
- Hang Seng's China enterprises index soared; it was up 1.02% to 12,999.58 at 0644 GMT
- The Shanghai Composite was up 0.87% to 3,474.75 at 0701 GMT
- China Q4 growth reached 6.8% in Q4, and 6.9% for 2017; the annual target was 6.5%
- The Bank of Canada raised interest rates by 0.25% as expected
- Bitcoin briefly fell below $10,000 and has now tumbled 50% from its record high
- UK house prices unexpectedly picked up last month from their lowest level in four years
- Apple issued a release saying it anticipates repatriation tax payments of about $38bn
- Australia's jobless rate came in at 5.5% in December, up from 5.4% expected
- The top Aussie miner BHP has cut its coking coal export target for fiscal 2018
- Miners dragged the S&P/ASX200 into the red; it closed down by a thin 0.02% at 6,014.60
- The US dollar edged lower against the yen; it was worth ¥111.1500 at 0612 GMT
- The AUD rose past 0.80 overnight, hitting a fresh four-month high, before falling back
- The release of the jobs data had little impact on AUD; it was worth 0.7973 at 0612 GMT
From the Floor
USD starts recovery. "The USD is fighting back again on the Beige Book release and the Apple cash repatriation," says Hardy.
Get all the latest from Saxo Bank's trading floors in From the Floor, within the hour.
Although not a base case scenario, Simon Fasdal urges all equity and bond investors to pay full attention to current developments in core yields in his Weekly Bond Update.
Rates to rise
The Bank of Canada hiked rates by 25 basis points, writes Saxo's Singapore trading team, and said the economic outlook is expected to warrant higher rates over time.
Tax bite ... Apple said it expected to pay a massive $38 billion in taxes as the technology giant transfers most of the cash it holds offshore back to the US. Photo: Shutterstock
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