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Chinese Growth Lowest in 28 Years - EMEA Brief 21 Jan

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  •  Chinese growth has officially fallen to its slowest in 28 years. Fourth quarter figures have been announced which confirm analysts’ expectations that growth would be 6.4%, averaging 6.6% for the year.
  • The US shutdown has now entered its 30th day. Trump offered protections for ‘Dreamers’ in an attempt to negotiate but this was quickly rejected by democrats as inadequate. Analysts now believe the shutdown will cause a 0.25% reduction in growth figures for the first quarter of 2019.
  • Jeremy Corbyn has repeated calls for Theresa May to rule out a no deal Brexit. The PM is due in parliament today to outline her plans following last week’s defeats
  •  Rightmove have published data for British property asking prices, they have had their weakest start since 2012 due to lack of demand as a result of Brexit uncertainty
  • Markets made strong gains over the weekend with the FTSE gaining 1.95% and the Dow gaining 1.38%.
  • Asian markets followed suit with the Hang Seng also gaining over 1% and the Nikkei up over 2%
  • High demand from China for Oil has pushed prices to 2019 highs despite the news of their economic slowdown.
  • Sugar prices have gained 1% in response to the gains in Oil. Sugar cane can be used to produce ethanol biofuel so higher oil prices increases demand for cane.

 

South Africa: Global equity markets are trading mixed this morning with US index futures around 0.3% lower, while Asian markets trade roughly 0.3% higher. Chinese GDP data showed slightly slower economic growth than in the previous quarter, although industrial production and retail sales data came in better than expected. Theresa May will again appear in U.K. parliament to try progress the Brexit deal with the country's policy makers. Precious metal prices trade modestly higher this morning, while crude oil has extended last weeks gains, with Brent now trading above the $62.50/barrel mark. Tencent Holdings is up 0.89% suggestive of a positive start for major holding company Naspers. BHP Billiton is trading 0.3% higher in Australia, suggestive of a slightly positive start for local resource counters.

Economic calendar - key events and forecast (times in GMT)

Economic Calendar 21.01.PNG

Source: Daily FX Economic Calendar

Corporate News, Upgrades and Downgrades

  • Mike Ashley, owner of Sports Direct and recent acquirer of House of Fraser is now in talks to buy HMV
  • The account scandal for Patisserie Valerie has continued with the investigation finding thousands of false entries in their ledgers
  • Rolls Royce are in talk to supply a nuclear plant in Essex. Concerns over the future of UK nuclear power have arisen following the announcement by Hitachi last week to suspend work on a plant in Anglesey 
  • William Hill has adjusted profit guidance down by 15%

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