Archived IMT (2010.01.20)

Mind China's Double Digit Growth Markets may start witnessing shades of 2007, when strong Chinese figures led to market jitters on the grounds of accelerating tightening from the PBOC. Thursdays release of China Q4 GDP is expected at +10.0-10.4%, which would further justify broader tightening from the PBOC --such as raising the actual lending rates (beyond higher bond yields and increased reserve requirements). Such justification COULD PROVOKE FURTHER NERVOUSNESS in global markets, weighing on the principal source (China) of global commodity demand, starting with metals, followed by energy. If the GDP and retail sales (both due on Thurs) come stronger than exp, then China may as well announce more tightening as early as this week.