China’s Economic Growth

chinaThe economic growth of China surpassed projections of estimates during the previous quarter as demand for exports accelerated and services spread out reinforcing the government’s case to stay away from broader stimulus measures.

According to the Chinese Government’s Statistics Bureau, the nation’s GDP increased 7.3 percent from July to September compared to the past year.

This beat the 7.2 percent median estimate but the expansion was still the slowest dating back to the first three months of 2009.

Government has slackened restrictions in home-purchase while China’s central bank infused liquidity to lenders as they strive to control property- generated deceleration. The government also gave up comprehensive interest rate reductions and suggested that it will endure a weaker expansion. This left the economy going towards the slowest growth for one whole year since 1990.

Reasonable exports and growing domestic demand checked the overall slowdown.

Industrial production increased eight percent in September as against the 7.5 percent median valuation of analysts and the 6.9 percent average in August. However, it was the slowest in over five years. Retail industry sales went up 11.6 percent.

Stocks dropped in China and Hong Kong because of speculation that enhanced growth will cut back prospects for big-scale stimulus. The Yuan and Australian dollar strengthened for the second successive day.

The People’s Bank of China has evaded reduction of standard interest rates or reserve requirements of banks to promote growth. It also lowered interest rates for lenders with regards to 14-day agreements for re-purchase for the second time this month.

Euro Region Stocks Fall

Stocks in the euro region plunged and showed a longest run of weekly losses in over one year. Inferior financial outcome affected concerns about the region’s economic revitalization.

STOXX (Europe) 600 Index declined 0.8 percent to 316.02 at trading floors in London. EU equities showed collapse which wiped away nearly $5.5 trillion. This was from share values globally.

There is a lot of conjecture that stimulus measures of the ECB will not suffice to prompt growth.

Benchmark index arrived at its lowest level following a drop of eight days which was the longest losing stretch within 11 years.

This recovered last October 17 after it posted the biggest recovery since November of 2011. The ECB announced that it will begin acquiring assets during the next few days. Stock gauge in the EU reduced losses after the ECB obtained short-dated covered bonds (France) and Spanish arrears.

CAC 40 Index diminished 1.4 percent. On the other hand, the IBEX 35 Spain Index used up 0.6 percent. On the other hand, the DAX Index of Germany fell back 1.6 percent which is the most significant waning among 18 markets in Western Europe. Meanwhile, the FTSE 100 Index in the UK went down 0.9 percent.

Number of shares changed hands in 600 listed companies of STOXX. It was 20 percent higher compared to the average during the previous month.

SAP dropped 4.2 percent to 51.74 euro.

NASDAQ Update

stock marketNASDAQ or the National Association of Securities Dealers Automated Quotations declined significantly last week as the stock markets in generally struggling. However, it has found adequate support at the vital level of 4100 level to return conditions around and then recover. The nice-looking hammer of the bounce settled just beneath the level of 4300. Due to this, traders felt that market could well go higher, if the aforementioned level of 4300 will be cleared. If this happens, the level of 4600 will be moved according to their opinion and the uptrend would continue going forward.

Starting at a level of 4100, the NASDAQ has enough support but that also goes all the way to an extension down to the level of 3950. This condition might bring the market to hold aloft buying in the region just being tested, so even if it is pullback at this point in time, it is still considered as a value more than anything else.

Looking at the direction, it has a very gentle slope that is calling the trend, consequently, and plenty of momentum is still expected as buyers are seen stepping in as the market has not yet been far overbought, and it is expected that this is the way market is moving forward.

Euro and USD

The single currency dropped versus the US dollar as the latter was bolstered by data which showed that sentiments of American consumers surprisingly improved in October.

The EUR/USD pair went down 0.38% to 1.2759 during late trading last week. This was not a long way from lows of 1.2745.

The pair will probably get support at approximately 1.2625. Resistance is seen at 1.2843.

The University of Michigan’s index for consumer outlook increased to 86.4 this month which is the highest since July of 2007.

A separate report pointed out that housing starts went up more than expectations in September.

Data boosted anticipation that the central bank will really increase interest rates during the second semester of 2015.

However, the US currency declined against other major currencies which led to a three-week slump against the common currency.

Germany is looking at a possible of 1.2% for 2014 although this was down from the previous 1.8 percent and a growth rate of 1.3 percent next year.

The ECB has already brought down interest rates to exceptional lows and offered four-year loans to commercial banks.

The euro scaled higher against the Japanese yen. EUR/JPY eased 0.15% to 136.38 in late trading last week.