Too much pressure on China's economy?

Daily Analysis - 05/03/2019

China is preparing for a tough struggle


At the opening of the yearly National People's Congress on Tuesday, Premier Li Keqiang stated that China the economic giant needs to be prepared for a "tough struggle" while the country faces a "grave and more complicated environment,"  Premier Li said to a gathering of approximately 3,000 people "We must be fully prepared for a tough struggle," "The difficulties we face must not be underestimated, our confidence must not be weakened, and the energy we bring to our work must not be allowed to wane." Tariff tensions with the U.S. marked this year’s gathering and the trade war was at the center of attention due to much pressure on China's economy and financial markets.

Asian markets mixed today

China Shares improved in early session while the annual parliamentary meeting started. In the meeting, Premier Li Keqiang announced that the country needs to be ready for a tough struggle as a complicated environment will affect the country's economy.

Shares in mainland China moved higher, with the Shanghai composite gaining more than 0.10% and the Shenzhen component rising more than 0.8%. The Shenzhen composite raised about 0.7%. Hong Kong's Hang Seng index was mainly at an even level.


Dow lost 206 points

On Monday the US Stocks turned back to bearish mode while the S&P 500 dropped back to an important level. Traders assumed a possible trade resolve between the U.S. and China is baked in. The Dow Jones Industrial Average dropped 206.65 points to 25,819.63, deleting an approximately 129.60 point profit. The Nasdaq Composite ended about 0.2% below at 7,577.50. The S&P 500 fell 0.4% to 2,792.60 after rising almost 0.5% snapping back below the key 2,800 level. Last Friday the general index ended above 2,800 marking its highest close since the end of 2018.


Dollar index higher

On Tuesday, the greenback held near to a 14-day top against important peers. It went up by a robust U.S. economy and a flagging euro.

The strong U.S. bond yields also supported the USD, though rates erased overnight tops. Investors that trusted and invested on the greenback had more going for it than some of its rivals.

The ECB is facing increasing demand to address how to preserve the Eurozone economy from a dangerous slowdown.


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