25 February, AtoZForex.com, Lagos – Yesterday, markets displayed two extremes of risk sentiment as hopes initially seemed to be growing faintly among global investors about a potential bottom in stocks, oil and yields might soon be seen. The day started out with extreme fears about a lot of concerns, ranging from low oil and stock prices, to a weaker Chinese yuan to the UK leaving the EU. By the middle of the day, players started to scramble to cover shorts as it became clear that pessimism was overdone.
Australia’s Private Capital Expenditure q/q released this morning showed 0.8% change in the total inflation-adjusted value of new capital expenditures made by private businesses. The trend volume estimate for total new capital expenditure fell 4.0% in the December quarter 2015 while the seasonally adjusted estimate rose 0.8%. The AUD/USD dropped after the report, due to the poor outlook in Australia’s Capital expenditure data, despite the data being positive for Q4.
China market rout continues
Chinese markets have extended the rout with a 6% drop during Thursday’s trading session. The Shanghai composite tumbling 6.48 percent while the Shenzhen composite fell 7.49 percent. Concerns loomed earlier in the week, after policy makers indicated that they want the Yuan to strengthen against the USD. The People’s Bank of China set the yuan mid-point rate notably lower at 6.5273 to the dollar on Tuesday, down 0.17 percent from Monday’s fix, which showed the central banks desire for a stronger yuan.
UK Second Estimate GDP q/q (9:30 P.M GMT)
The change in the inflation-adjusted value of all goods and services produced by the economy is forecast to come at 0.5%, in line with last quarter release. In the previous release, UK GDP in volume terms was estimated to have increased by 0.5%. This marked eleven consecutive quarters of positive growth. The pound has been weak against the dollar and looks set to stay that way, having hit a 7 year low against the greenback.
US Core Durable Goods Orders m/m (1:30 P.M GMT)
Aside the UK GDP, today we also have the US Core Durable Goods Orders m/m and unemployment claims report. Both forecast to come at 0.7% and 271k respectively. The dollar remains mixed against its major counterparts. Hence, a catalyst for the establishment of a clear trend is being sought.
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