China Chill Deepens, Copper Breaks Support
| Consumer Confidence Index (FEB) | Mar 12 05:00 |
| Home Loans (JAN) | Mar 12 00:30 |
A wall of worry about the Chinese economy struck risk assets on Tuesday. For the second day in a row the Australian dollar was the laggard and the yen led in the classic risk-off trade. Up later, Japan releases CPGI data and consumer confidence while Australia posts home loan data. In today's Premium Insights, we start off the week refocusing on CAD and GBP for different reasons; the CAD for further bearishness following last week's release of disappointing Canada jobs figures and the lack of GBP focus, especially ahead of this month's release of the UK Budget. See our new GBPUSD trade and 3 charts below. Existing trades are in EURUSD, GBPUSD, USDJPY, AUDUSD, USDCAD, AUDCAD and AUDNZD.
The intricacies of intermarket trading were on display Tuesday as a breakdown in copper prices spilled over to broader markets. Prices broke a double bottom at $300 from 2011 and 2013, setting off a wave of selling in risk assets.
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Latest Premium Update: Refocusing on GBP & CAD
We use this week to refocus on CAD and GBP for different reasons; the CAD for further bearishness following last week's release of disappointing Canada jobs figures and the lack of GBP focus, especially ahead of this month's release of the UK Budget. See our new GBPUSD trade and 3 charts below.
The fallout from the soft Chinese trade data reverberated Monday but the fear trade was limited. The yen was the top performer while the Australian dollar lagged. The focus now switches to today's Bank of Japan decision. In our existing Premium Insights, 1 USDJPY long awaits final target at 103.80, 1 GBPUSD long in progress alongside 1 EURUSD, 1 NZDUSD, 2 AUDUSD, 1 AUDCAD and 2 AUDNZD remain in progress. All trades and charts are in the latest Premium Insights.
Read More...Rather than attributing the weakness in China's trade figures to CNY decline, it is more accurate to view the latter as an effect of the general slowdown in the economy and authorities' concerns with speculative carry trades. There are also risks that deflation may set in China. Full charts & analysis
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