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Beijing’s brutal trade figures have sparked a sell-off in the mineral-related stocks, and the overnight announcement from China has set the pace for the growth figures that are due out later this week. The collapse in China’s trade balance on the month was so dramatic it left some traders wondering whether the figures were accurate, and other dealers viewed the dreadful numbers as a sign for further stimulus.
The dollar is back dominating the currency markets especially sterling, and the pound’s problems are being multiplied by the uncertainty surrounding next month’s election. The last time the pound dropped to this level against the dollar was May 2010, and this coincided with the last UK general election. The euro is also being eroded as the Greek government puts together proposals for its creditors before the deadline this week.
IG is offering political markets on the UK general election, and IG’s general election binary is indicating the Conservatives will take 287 seats. It is also signalling there is an 85% of no overall majority. IG is also offering a political market on the US presidential election, and the binary bet is suggesting there is a 44% chance of Hillary Clinton winning.
We are expecting the Dow Jones to open 30 points lower, at 18,025, and this will be the crunch week for the Dow as the US banks reveal their first-quarter numbers. US banks are going back to basics, and the days of being heavily dependent on dealing revenue are over, with Wall Street finance houses turning their attention to traditional investment banking services for earnings.