China posts its weakest quarterly growth since 2009, the IEA say the world is drowning in oil, and stocks are up. Here are some of the things people in markets are talking about today.
Chinese GDP growth in the fourth quarter of 2015 slowed to 6.8 percent from a year earlier, the weakest since 2009. For the first time ever, services accounted for the majority of the economy, rising to 50.5 percent. Slowing growth, coupled with disappointing industrial output data, led to increased expectations of further stimulus and stocks in China rallying the most in two months.
Drowning in oil
The International Energy Agency has warned that global oil markets could “drown in oversupply,” sending prices even lower. If that's not enough bad news for the oil majors, they now have to worry about refining margins which are starting to get squeezed. The International Monetary Fund this morning cut its growth forecast for Saudi Arabia to 1.2 percent for 2016, from a previous 2.2 percent forecast.
Stocks are up
Following on from the overnight rally in Asia, European stocks are higher in trading this morning with the Europe Stoxx 600 gaining 2.1 percent by 11:05 a.m. London time. S&P 500 futures are also pointing higher after yesterday's U.S. market holiday with March contracts adding 1.6 percent to 1,901.5 as of 11:20 a.m. in London.
Dire predictions for the oil market are not being reflected in this morning's price action with both Brent and WTI moving higher. Brent futures were trading at $29.87 a barrel at 11:17 a.m. London time, up $1.34 , while WTI was at $29.94, up $0.52. Industrial metals, which have been under pressure lately, have been getting some relief with copper rising by the most in a month while the Bloomberg Commodity Index gained 1.2 percent. Gold is down.
U.S. Treasuries fell, with the benchmark 10-year note heading for its first decline in five sessions, on a waning safe haven bid. Analysts are warning that this is not the start of a selloff with Sumitomo Mitsui Trust’s Hideaki Kuriki saying Treasury yields may be less than 2 percent for the next three-to-five years. U.S. regulators, meanwhile, are taking a step toward increasing their oversight of U.S. Treasuries trading in response to complaints from both traders and government officials that the market is too opaque.
What we've been reading
This is what's caught our eye over the last 24 hours.
- S&P correction seems really small - on a long enough timeline.
- IEA sees Iran's return intensifying battle for European oil market.
- How low can the Canadian dollar go?
- What analysts expect from Draghi.
- These are the world's most innovative economies.
- Norway is accelerating a shift to life after oil.
- Trump says he'll get Apple to manufacture products in the U.S.
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