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12 Jul 2013
Flash: More risk? - Rabobank
FXstreet.com (Barcelona) - Jane Foley, Senior Currency Strategist at Rabobank notes that Fed chairman Bernanke this week drove home the message that “a highly accommodative policy is needed for the foreseeable future”.
She sees that the result was that last night the S&P 500 and the DJIA closed at a record highs, but it is not all good news however. She feels that the less convincing performance of Asian stock markets overnight reflects prevailing concerns about slowing growth in the world’s second largest economy. Foley adds that earlier this week the IMF cut its global growth forecast for a fifth time since the start of last year with slower projected growth in China being included into the projection.
She sees that while previously the Chinese authorities have stepped up to the plate by announcing policy stimulus, the rise in CPI inflation to 2.7% y/y in June suggests that room for aggressive policy support may be limited and the authorities may instead be prepared to allow the growth rate to slip further. She writes, “The release of Chinese Q2 GDP on Monday is keenly awaited.”
She sees that the result was that last night the S&P 500 and the DJIA closed at a record highs, but it is not all good news however. She feels that the less convincing performance of Asian stock markets overnight reflects prevailing concerns about slowing growth in the world’s second largest economy. Foley adds that earlier this week the IMF cut its global growth forecast for a fifth time since the start of last year with slower projected growth in China being included into the projection.
She sees that while previously the Chinese authorities have stepped up to the plate by announcing policy stimulus, the rise in CPI inflation to 2.7% y/y in June suggests that room for aggressive policy support may be limited and the authorities may instead be prepared to allow the growth rate to slip further. She writes, “The release of Chinese Q2 GDP on Monday is keenly awaited.”