FTSE Rallies On Global Economic Recovery Optimism
The FTSE, along with its European peers are pointing to a stronger start, boosted by upbeat data from the US and China.
Share this:
The FTSE, along with its European peers are pointing to a stronger start, boosted by upbeat data from the US and China. However, gains could remain capped in a quiet day for corporate releases and as the focus remains on US lawmaker’s ability to agree additional stimulus.
Chinese CPI rises
China’s consumer inflation accelerated for a second straight month in July. The CPI inflation gauge grew 2.7% yoy in July, up from 2.5% in June. On a monthly basis, prices increase 0.6%. Official data also showed that PPI which measures inflation at factory level rose 0.4% month on month.
The data adds to mounting evidence that the economic recovery in China is not only solid, but also gaining momentum, boosting optimism that the world’s second largest economy will offer serious support to the global economic recovery.
China’s consumer inflation accelerated for a second straight month in July. The CPI inflation gauge grew 2.7% yoy in July, up from 2.5% in June. On a monthly basis, prices increase 0.6%. Official data also showed that PPI which measures inflation at factory level rose 0.4% month on month.
The data adds to mounting evidence that the economic recovery in China is not only solid, but also gaining momentum, boosting optimism that the world’s second largest economy will offer serious support to the global economic recovery.
The data comes following Friday’s better than forecast non-farm payroll data. 1.7 million new jobs were created in the US in July and after President Trump signed executive orders over the weekend to extend unemployment benefits after Democrats and Republicans failed to agree a deal. Negotiations between the two parties are set to continue on Monday.
US – Sino tensions to cap gains
Concerns over rising US – Sino tensions are likely to weigh on sentiment, keeping gains in check. On Friday Trump signed executive orders banning TikTok and WeChat whilst also sanctioning Hong Kong's Carrie Lam. China has since arrested Jimmy Lai a pro-democracy media mogul angering the US. Most importantly for the markets this week US – China negotiators will meet to assess progress in the Phase 1 trade deal. This is what the market is really interested in. So far, Trump is driving a hard line on China heading towards the US elections.
Oil jumps 1%
Oil is pushing higher on Monday, extending last week’s gains, boosted by upbeat data from the US and China and by a bullish demand picture from Saudi Aramco, the largest oil producer in the world. State owned Aramco’s chief executive said that oil consumption in Asia, Aramco’s biggest market has almost returned to pre-covid levels. As economies across the rest of the globe continue to re-open he sees a similar pattern emerging. The rosy demand outlook, combined with Iraq saying it will cut production by a further 40,000 barrels a day to compensate overproduction over the past three months are overshadowing the stimulus deadlock in Washington, at least for now.
FTSE Chart
The FTSE, along with its European peers are pointing to a stronger start, boosted by upbeat data from the US and China. However, gains could remain capped in a quiet day for corporate releases and as the focus remains on US lawmaker’s ability to agree additional stimulus.
Chinese CPI rises
China’s consumer inflation accelerated for a second straight month in July. The CPI inflation gauge grew 2.7% yoy in July, up from 2.5% in June. On a monthly basis, prices increase 0.6%. Official data also showed that PPI which measures inflation at factory level rose 0.4% month on month.
The data adds to mounting evidence that the economic recovery in China is not only solid, but also gaining momentum, boosting optimism that the world’s second largest economy will offer serious support to the global economic recovery.
China’s consumer inflation accelerated for a second straight month in July. The CPI inflation gauge grew 2.7% yoy in July, up from 2.5% in June. On a monthly basis, prices increase 0.6%. Official data also showed that PPI which measures inflation at factory level rose 0.4% month on month.
The data adds to mounting evidence that the economic recovery in China is not only solid, but also gaining momentum, boosting optimism that the world’s second largest economy will offer serious support to the global economic recovery.
The data comes following Friday’s better than forecast non-farm payroll data. 1.7 million new jobs were created in the US in July and after President Trump signed executive orders over the weekend to extend unemployment benefits after Democrats and Republicans failed to agree a deal. Negotiations between the two parties are set to continue on Monday.
US – Sino tensions to cap gains
Concerns over rising US – Sino tensions are likely to weigh on sentiment, keeping gains in check. On Friday Trump signed executive orders banning TikTok and WeChat whilst also sanctioning Hong Kong's Carrie Lam. China has since arrested Jimmy Lai a pro-democracy media mogul angering the US. Most importantly for the markets this week US – China negotiators will meet to assess progress in the Phase 1 trade deal. This is what the market is really interested in. So far, Trump is driving a hard line on China heading towards the US elections.
Oil jumps 1%
Oil is pushing higher on Monday, extending last week’s gains, boosted by upbeat data from the US and China and by a bullish demand picture from Saudi Aramco, the largest oil producer in the world. State owned Aramco’s chief executive said that oil consumption in Asia, Aramco’s biggest market has almost returned to pre-covid levels. As economies across the rest of the globe continue to re-open he sees a similar pattern emerging. The rosy demand outlook, combined with Iraq saying it will cut production by a further 40,000 barrels a day to compensate overproduction over the past three months are overshadowing the stimulus deadlock in Washington, at least for now.
FTSE Chart
Related tags:
Open an account in minutes
Experience award-winning platforms with fast and secure execution, and enjoy tight spreads from 0.5 pts on FX and 0.3 pts on indices.
Economic calendar
Web Trader platform
Our sophisticated web-based platform is packed with features.
Related articles
EUR/USD, FTSE 100 Forecast: Two trades to watch 1507
EUR/USD rises after weaker US CPI, PPI up next. FTSE 100 falls as weak China GDP data hits miners.
FTSE 100, USD/JPY Forecast: Two trades to watch
FTSE eases modestly despite inflation unexpectedly holding steady. USD/JPY drifts lower ahead of the FOMC rate decision.
EUR/USD, FTSE 100 Forecast: Two trades to watch 21-05-26
EUR/USD slips below 1.16 as weak eurozone data weighs on sentiment. FTSE 100 slips as oil prices rebound and caution returns.
This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.
StoneX Financial Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the StoneX group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), StoneX Financial Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact StoneX Financial Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.
In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither StoneX Financial Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.
StoneX Financial Pte. Ltd. is not under any obligation to update this report.
Trading CFDs carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit www.forex.com/en-sg/terms-and-policies for the complete Risk Disclosure Statement.