That’s no typo either. At time of writing the Chinese Property Developer, which struck markets with fears of contagion in the week , is on target for its best day ever.
Evergrande, never bland!
The Hong Kong stock market reopened after yesterday’s public holiday to ascertain Evergrande (3333) gap higher by round 10% and rally almost 33% by today’s high. Still, the move must be taken in context of where it came from. it’s fallen around -93% from its 2020 high of 27.95 right down to a coffee of two .06 last week, and it’s arguably easier to feature a 3rd from such low numbers after such a coffee fall (it wasn’t faraway being a penny stock). And whilst Jerome Powell soothed contagion fears at yesterday’s news conference , Beijing injected liquidity to support markets and Evergrande did vow to pay (some) of its debt today, this saga remains faraway from over. Assuming they miss today’s separate US $88 million debt payment, it simply buys them another 30 days and that they produce other debts to service also .
Elsewhere, the returns might not are so extreme overall but stocks followed Wall Street higher. The ASX 200 rose around 1% with the Hang Seng and Nikkei futures up around 0.8%.
GBP picked up overnight with risk assets on Fed, China and Evergrande optimism. Today’s main events are a number of flash Markit PMI’s across Europe and US which begins with France at 07:45, Germany at 08:30 and Europe at 09:00. Oh, and that we have the SNB policy rate at 08:30 but there are not any expectations of a about-face today.
UK PMI data is then scheduled for 09:30 before this month’s BOE (The Bank of England) at 12:00. Whilst there have been hopes for a hawkish meeting, exponentially rising energy costs of recent weeks is probably going to ascertain the BOE twiddling my thumbs today because the likelihood of weak growth in GDP appears strong. Still, with several GBP pairs sitting at key support levels it’s going to take a dovish meeting to ascertain further selling pressure. We therefore have a neutral view on GBP today.
USD/CHF is of interest for potential bullish setups. within the US session we then have jobless claims, retail sales and flash PMI data to seem forward to.Copper futures have remained above $4.00 despite Evergrande woes fanning growth fears (and dwindling demand for copper). Now that fear has taken a back seat it leaves potential for copper to continue higher over the near-term. A 3-bar bullish reversal formed yesterday (Morning Star) which respected the 200-day eMA, monthly S1, weekly S2 pivot points and held above $4.00. It trades slightly below the centre point of the 4.00 – 4.435 range but prices have held near yesterday’s highs, so we’re hoping support are often build above (or around) 4.18 before continuing higher today.