The economic statistics data released on Monday clearly indicate that the increased customs duties introduced by the United States have begun to have a negative impact on the Chinese economy. This forces many market participants to believe that Beijing will be more compliant with America in the matter of trade relations.
On the one hand, these expectations are supporting positive market sentiment, and on the other hand, a noticeable drop in export and import volumes in the "heavenly" in December is frightening, since the second largest economy in the world can also carry other countries and regions with its inhibition of growth.
According to the data presented, the volume of exports in annual terms in December fell by 4.4% against the growth for the previous reporting period of 5.4% and an increased forecast of 3.0%. At the same time, the decline in imports was even stronger. The index of imports in China fell by 7.6% against a year earlier growth of 3.0% and expectations for a rise of 5.0%. It should be noted that the trade balance increased over the period under review to 57.06 billion dollars from 44.71 billion dollars, with a growth forecast to 51.53 billion dollars. The growth in the trade balance was strongest in the last two years.
In the wake of these generally alarming statistics, the mood of the market players was still spoiled, and the demand for risky assets went down. On this wave on Monday in the negative territory, the stock markets closed.
In the foreign exchange market, the situation has stabilized, although in general, the US dollar remains under pressure. The main reasons that contribute to this are the expectations of a pause in raising interest rates by the Fed this year, or perhaps even stopping the rate-raising process altogether, as well as the ongoing shutdown of US governments in the wake of a steady political struggle between D. Trump and his opponents in America.
Today, the market's attention will be drawn to a vote in the British Parliament on the country's exit from the EU, which will be presented by Prime Minister T. May. It is assumed that she will be rejected by the deputies, which should have a negative impact on the sterling rate, but if the opposite happens, we should expect it to grow significantly, and not only in tandem with the US dollar.
Forecast of the day:
The currency pair GBP / USD in the wake of the Brexit vote results in the British Parliament can either rise or fall. May's adoption plan may push the pair up to 1.3000. At the same time, if this does not happen, the pair may decline to 1.2800.
The currency pair EUR / USD, as well as GBP / USD, may respond to the outcome of the vote in Britain. Positive news will contribute to its growth to 1.1560, and negative to decline to 1.1425.
