Monday 20 February 2017

Markets look to China as news slows in West

Published 08/08/2016 | 02:30

Fears of a potentially messy Chinese economic slowdown dominated trading in the first weeks of 2016 REUTERS/Stringer CHIN
Fears of a potentially messy Chinese economic slowdown dominated trading in the first weeks of 2016 REUTERS/Stringer CHIN

With the news flow in Europe and the US slowing as the August holidays take hold, investors who haven't taken off for the summer will focus on China this week.

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Fears of a potentially messy Chinese economic slowdown dominated trading in the first weeks of 2016 - producing massive swings in equity and oil markets in particular, before huge intervention by Chinese state authorities calmed markets at home and abroad.

The Asian giant is expected to be back in focus this week, with a raft of trade balance, inflation and retail sales data all due.

It will provide some insights into the extent the Chinese economy has stabilised since the start of the year, and any surprises will have implications for commodities and China-exposed emerging markets in particular.

Closer to home, markets will be watching for follow-through from last week's Bank of England actions, including in the bond market where the Bank has committed to buy an additional £10bn of high-quality corporate bonds - a move intended to force other buyers to take bigger risks in order to generate returns.

In Ireland, earnings season is grinding to a close with FBD the only big local name due to report, on Friday.

After a rough 2015, insurers have been rebuilding profits - including by driving up premiums. FBD's Fiona Muldoon is still relatively new in the ceo role. She faces a particular challenge in balancing price and profit at FBD, which is owned in large part by a cohort of its own farm-sector customers.

The week ahead

Monday: Air France-KLM - July traffic stats

Tuesday: Central Bank info - June 30 Commission minutes published; Lufthansa - July traffic stats

Wednesday: SIG plc - Q2 2016 results

Thursday: USA 30-year bond auction

Friday: FBD Holdings 1H results; Central Bank data - Retail Interest Rates

Irish Independent

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