MARKET UPDATE: Q4 earnings and Chinese data

 On balance the overall tone since the start of the year has been just about positive, with firmer economic data, most notably in China outweighing sovereign debt concerns in Greece and elsewhere
 With the markets gyrating between a “Risk on” and “Risk off” tone from the turn of the year, “Risk off” may be the tone at the start of this week, as US equities ended the week on a negative note ahead of the Martin Luther King holidays
 Bank earnings will be a key focus, with Citigroup, Morgan Stanley, BoA, Wells Fargo and Goldman Sachs set to report this week
 Given the growing influence of Chinese data on markets the monthly data pack from China will capture more attention than usual on Thursday
 Chinese GDP data is likely to reveal an acceleration in growth in Q4 YoY to above 10%
 In the Eurozone the main event is the German ZEW survey tomorrow, which is likely to show further signs of flagging, due to Greek concerns
 UK data kicked off on a positive note this week, with house prices rising 0.4% MoM in January and 4.1% YoY according to UK property website Rightmove, the biggest annual gain in over a year
 The data as well as expectations that Kraft will raise its bid for Cadbury will likely help GBP in addition to other GBP positive M&A news

These are the salient points kindly contributed by Mitul Kotecha, MD & Head of Global Currency Strategy at Calyon. To view the full discussion, please click here to visit the original post on his website The Econometer

MARKET UPDATE: G3 Economies Show Modest Growth

 A few themes are already becoming evident into 2010. Firstly, the dominance of China and any news on the Chinese economy is becoming increasingly apparent, as reflected in the market reaction to trade data and hike in reserve requirements this week (see our post, China Tightens Monetary Policy)
 The second theme that is developing this year is the “risk on” environment for asset markets
 Another theme is the problems and concerns about sovereign debt and ratings, which will likely intensify further
 A final theme that could be added is the underperformance of the Eurozone economy, a theme that is likely to become more apparent as the year progresses
 Not to forget the US, their economy is showing more signs of life but even so, the improvements are “modest” as reflected in the Fed’s Beige Book

To view the full discussion, please click here to visit the original post on The Econometer website

MARKET UPDATE: China Tightens Monetary Policy

Before we discuss the changes in China’s Monetary policy, summarised in the latest blog by Mitul Kotecha, Head of Global Currency Strategy at Calyon, we thought it valuable to outline the differences in the way the People’s Bank of China (PBoC) operate monetary policy relative to major central banks in the West...