CFDs are a leveraged product and can result in losses that exceed deposits. Trading CFDs may not be suitable for everyone, so please ensure you fully understand the risks and take care to manage your exposure.

Is bad news good news again?

If you look at how Asian markets performed overnight the data impact was positive

CFDs are a leveraged product and can result in losses that exceed deposits. Trading CFDs may not be suitable for everyone, so please ensure you fully understand the risks and take care to manage your exposure.
bg_chart_674319

Chinese data has disappointed over night with GDP, industrial production and retails sales all missing estimates. However, if you look at how Asian markets have performed overnight the data impact was positive for the markets. China almost touched the 3000 level and Australia closed above 4900 gaining 0.9%.

Traders will be asking how these gains are possible after disappointing data.

To make sense of this scenario, one has to look at the increasing possibility that the Chinese government will pump more money into the economy to counteract the apparent decline in the economy. Therefore, investors were upbeat today resulting in gains throughout Asia.

DAX

This also means that it could be a favourable day for Europe. We are calling the Germany 30 up 91 points steering clear of the 2015 lows of 9400. There is a mix of data coming out of Germany today with Economic Sentiment and EU CPI being released simultaneously. If these figures come out better than expected we could see a move higher; however, upside in equity markets could remain limited with the unclear picture coming out of Asia and continued commodity weakness.

US Crude

The immediate outlook for Oil remains negative with Iran adding to the pressure by massively increasing output to 500,000 Bpd. This is just the start and if Iran will ramp up production further, it could single-handedly offset the reduction by other non-OPEC members. Hence, any rallies in oil to $31.60 could be selling opportunities for traders looking for a price of the commodity closer to $20.   

This information has been prepared by IG, a trading name of IG Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication.  Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. 

CFDs are a leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your initial deposit, so please ensure that you fully understand the risks involved.