China And The UK Surprise In Opposite Directions

Overview: Helped by new record highs in the US, global stocks are moving higher today. Nearly all the markets in the Asia Pacific region advanced and the seventh consecutive weekly rally is the longest in a couple of years. Europe's Dow Jones Stoxx 600 is at new record highs and appears set to take a four-day streak into next week. US shares are trading firmly. Since the end of last September, the S&P 500 has fallen in only three weeks. A shockingly poor UK retail sales report is helping to extend the decline in UK interest rates. The 10-year yield is off a couple of basis points to bring this week's decline to more than 13 bp. The implied yield on the March short-sterling futures contract has fallen almost 20 bp since the end of last year. Other European bonds yields are mostly a little softer. The US 10-year yield is steady a little above 1.80%. The dollar is paring its weekly loss against most of the major currencies. The yen and sterling underperformed this week. The JP Morgan Emerging Market Currency Index is a touch higher today but is off about a quarter of a percent this week. Gold is a little higher but is still poised to snap a five-week rally. Oil is little, and the March WTI contract is nursing a loss of about 0.75% on the week.  

Asia Pacific

China's data showed that even though the economy slowed, it ended on a solid note, and appeared to be finding some traction before the trade deal was struck. With most US tariffs still in place, the trade deal might buy Beijing some time, but it does not appear to directly help the world's second-largest economy.  Some of the liberalization efforts may support growth indirectly, and the imports of foodstuff may help ease prices. The economy grew 1.5% in Q4 for a 6% year-over-year rate. December industrial output rose 6.9% from 6.2% year-over-year in November and is the best since March. Retail sales rose 8.0%, the same as in November. Investment in fixed assets rose (5.4% vs. 5.2%) for the first time since June.  

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Read more by Marc on his site Marc to Market.

Disclaimer: Opinions expressed are solely of the author’s, based on current ...

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