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Forex Today: Stocks Slip on Chinese Inflation Data

By Adam Lemon
Adam Lemon
By Adam Lemon

Adam Lemon began his role at DailyForex in 2013 when he was brought in as an in-house Chief Analyst. Adam trades Forex, stocks and other instruments in his own account. Adam believes that it is very possible for retail traders/investors to secure a positive return over time provided they limit their risks, follow trends, and persevere through short-term losing streaks – provided only reputable brokerages are used. He has previously worked within financial markets over a 12-year period, including 6 years with Merrill Lynch.

The absence of Chinese inflation and an annualized PPI running at -5.4% send deflationary fears through the market, leading to a stock market selloff during today’s Asian session.

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  1. Equity markets are lower on flat Chinese inflation data and a rapidly falling PPI which is showing an annualized rate of -5.4%, leading to fears of deflationary pressure. Most global stock markets are trading lower, especially in Asia, where the Hang Seng Index and the Nikkei 225 Index are both down from their respective daily opens.
  2. Bitcoin again closed Friday below what seems to be a very pivotal round number at $31k, with the price action now looking more uncertain, suggesting that a bullish breakout may not be happening.
  3. The Japanese Yen remains the weakest major currency over the long term and over today’s Asian session. Some days ago the USD/JPY currency pair made a new 7-month high above ¥145, but it is now trading well below that level. Trend traders will remain interested in being short of the Japanese Yen, while the US Dollar has been the strongest major currency so far today. The Australian Dollar is also weak today following the impact of the poorer than expected Chinese economic data.
  4. Governor Bailey of the Bank of England has rejected calls to raise the inflation target above 2%, despite the UK’s relatively high and persistent rate of inflation.
  5. Markets are expecting a 25bps rate hike from the Bank of Canada later this week.

 

Adam Lemon
By Adam Lemon

Adam Lemon began his role at DailyForex in 2013 when he was brought in as an in-house Chief Analyst. Adam trades Forex, stocks and other instruments in his own account. Adam believes that it is very possible for retail traders/investors to secure a positive return over time provided they limit their risks, follow trends, and persevere through short-term losing streaks – provided only reputable brokerages are used. He has previously worked within financial markets over a 12-year period, including 6 years with Merrill Lynch.

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