• Chinese data puts the bid in stocks
• UK data helps pound
• Nikkei 0.44% Dax 0.13%
• UST 10Y 0.68
• Oil $37
• Gold $1963/oz
• BTCUSD $0651

Asia and the EU

• CNY IP 5.6% vs. 5.1%
• GBP UK Jobless claims 77K vs. 93K

North America Open

• No Data

Chinese data provided a boost to equities in late Asia and early European trade with stock index futures higher by 30 – 50 basis points while FX remained steady in a generally quiet session with little additional newsflow to move prices.

Chinese Industrial Production and Retail Sales printed better than expected at 5.6% vs. 5.1% and 0.5% vs. 0.0% respectively indicating that the economy was recovering quickly from the COVID induced slow down and that help put a bid underneath equities into the European morning.

The news was a welcome bit of data for bulls betting on the recovery thesis as it shows that the worlds second-biggest economy is clearly starting to grow again and that in turn suggests that China could act as a locomotive to the rest of the world provided that political conflicts do not escalate.

Elsewhere the action was quiet with currencies essentially flat with the exception of the pound which moved towards the 1.2900 figure on better jobless claims count which came in at 73K vs. 99K. Cable remains surprisingly robust despite the difficulties of achieving a graceful Brexit deal but the support may be driven by the hope of last-minute compromise which is emblematic of nearly all EU negotiations. Still, the market may be much too complacent about the risk of a hard Brexit spinout as EU officials do not appear to be conciliatory in the face of UK intransigence. There remains a serious risk of the pair trading towards 1.2500 if negotiations fall through.

In North American today the calendar is barren so equity flows will likely drive trade as traders look for new catalysts. For now, the upward bias remains in place and longs will no doubt try to push the S&P through 3400 as the day proceeds.