-1690273946.png)
Lack of Detail at Politburo
The keenly awaited Chinese Politburo meeting yesterday was a mixed bag for investors. On the one hand, commodities prices and local markets were seen rising as Chinese leaders promised more measures to help revive the economic recovery in China, signalling a rescue package to come later this year. However, the lack of details was ultimately unfulfilling. In a statement released on the back of the meeting, the 24-member council noted that the country was undergoing a “torturous recovery” on the back of the pandemic. The statement went on to say that it was “necessary to actively expand domestic demand” and “expand consumption by increasing residents’ income”.
More Measures but No Rescue Package Yet
This latest guidance comes on the back of a wave of recent measures such as the easing of restrictions on mortgages as well as incentives to buy electronics and cars. However, with the market still awaiting a solid fiscal stimulus package, this latest headline is unlikely to have a lasting impact on markets. For now, though, commodities currencies are being boosted on the back of the meeting with AUD rising firmly. If we start to see more concrete details of a forthcoming stimulus package, this should provide some proper support for risk sentiment. Until then, tomorrow’s FOMC will remain the key focus.
Technical Views
AUDUSD
The correction lower in the Aussie has stalled for now, with price finding demand ahead of the .6681 level. Momentum studies are turning higher also, putting focus on the .6857 level and the bearish trend line. This is a key area for bulls and a break is needed here to open the way for a move to .7103 next.
.png)
Disclaimer: The material provided is for information purposes only and should not be considered as investment advice. The views, information, or opinions expressed in the text belong solely to the author, and not to the author’s employer, organization, committee or other group or individual or company.
Past performance is not indicative of future results.
High Risk Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75% and 75% of retail investor accounts lose money when trading CFDs with Tickmill UK Ltd and Tickmill Europe Ltd respectively. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Futures and Options: Trading futures and options on margin carries a high degree of risk and may result in losses exceeding your initial investment. These products are not suitable for all investors. Ensure you fully understand the risks and take appropriate care to manage your risk.
With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.