Traders are bullish about mineral-focused stocks for the second day in a row, as the fear that China is approaching a credit crunch has been put to bed by the People’s Bank of China (PBOC). The Beijing-based central bank provided liquidity for the overnight lending market, which has supported local banks. This helped investors to feel more confident in the Chinese economy, which is a large importer of metals.
There was some positive news this morning in terms of economic announcements. The UK economy grew by 0.3% in the first three months of 2013, in line with expectations, and the jobless rate in Germany declined slightly. This boosted confidence in the countries’ respective equity markets.
In the US, we are calling the Dow up 75 points at 14,985. The number of people claiming unemployment benefit fell by 9000, which was marginally better than economists’ estimates. Jerome Powell of the Federal Reserve is speaking at 3.30pm, and if he signals that its stimulus package will be reduced we could see a sell-off.