Asian stocks reached a seven-month high this morning on positive US housing data and signs of stabilization in China. The MSCI-index for south east Asia, Shanghai composite and the Australian stock market rose between 0,5 and 1 percent. This, in spite of the fact that China’s GDP third quarter domestic product grew 7.4 percent from a year earlier. This is the seven straight quarter of slower growth.
The numbers, however, met expectations; it is furthermore encouraging that asset investment, retail sales and industrial output exceeded forecasts. Statistical figures for September, the last month in the quarter, are much stronger than the previous two months. The political succession which has created question marks and economic instability seems closer to a solution. These combined factors point to stabilization of the Chinese economy and have lifted the economic sentiment which is more positive than in months reflected by the jump in the Shanghai index over the last days.
The US markets ended flat yesterday night. IBM which constitutes 11 % of Dow Jones, fell 4,91 percent. Intel and Cisco delivered weaker than expected results. US home building came in much stronger than expected and surged to its highest level since the summer of 2008. Together with better than expected third quarterly company results and stabilization in China, the housing numbers shall probably increase investors risk appetite and higher demand for commodities. The bell water Copper futures are pointing strongly upwards. Japanese yen, a safe haven for investors, have fallen substantially during the last week. USD/JPY is trading at 79,165.
The Euro/USD is at 1.3097 after reaching 1.3125 in yesterday’s trade. The Euro has fallen somewhat back in early trading in Asia. That might be seen a technical correction after a strong rally over the last days. Gold has fallen back from yesterdays high on 1753 and trades at 1749. Silver is stabile on 33,18. Brent crude has recovered in Asia again trading close to USD 114 a barrel after falling back to 113. NYMEX is stabile on USD 92. Australian dollar touched a two-week high of USD 1,0395 after the Chinese data. It is now trading at 1.0384. The Scandinavian currencies, Swedish krones (SEK), Norwegian krones (NOK) and Danish krones (DK) are posting gains against the dollar.
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