China Reduces GDP Estimates

China has announced its 2015 GDP target of 7.00% after Chinese Premier Li Keqiang highlighted the expanding risks to the growth outlook. This comes on the heels of the latest interest rate cuts by the People’s Bank of China and growing concerns about liquidity conditions. The remarks from the Premier sent stocks tumbling with the Chinese offshore Renminbi trading substantially weaker after the comments. Annualized trade growth for the export nation is targeted at 6.00% but downward economic pressure both domestically and internationally may weigh heavily on these efforts. Cooling global economic conditions might harm these efforts which will be hampered further by rising nonperforming loans on Chinese bank balance sheets.

In a shocking omission, IMF Executive Director Paolo Batista admitted on Greek TV that the true intentions of the bailout packages organized for Greece was to save French and German banks with serious exposure to Greek assets. Instead of letting creditors suffer losses from imprudent lending, the bailout transferred the risks from banks to taxpayers highlighting the true nature of the IMF’s activities. None of the bailouts were intended to help the Greek’s but rather ensure the rest of Europe’s success at Greece’s expensive. His scathing criticisms also extended to the European Central Bank, Euro Area finance ministers as well as IMF Managing Director Christine Lagarde leading him to suggest Greece should completely restructure debt by negotiating directly with the IMF. This commentary along with other factors sent EURUSD tumbling below recent lows at 1.11 ahead of today’s ECB interest rate decision and press conference.