10 Jun 2013
Flash: Chinese Data disappoints over the weekend - Societe Generale
Kit Juckes, Global Head of Currency Strategy at Societe Generale notes that Chinese data over the weekend was disappointing.
He sees that soft domestic demand, weak trade, no inflationary pressure. Q2 will see GDP growth slow. Further, he notes that Wei Lao's commentary is becoming very downbeat, verging on downright scary. He feels that it is simply bad news for commodity markets and commodity-related currencies. Further, he writes, “Add it to the rise in US yields and it makes me highly suspicious of any bounce in EM assets. Within G10FX, AUD/USD has another 10% downside, and long USD/CAD looks a great risk-reward trade. Most of our EM recommendations are in FX too, with ZAR, PLN, HUF and RUB all ‘sells'. ‘Sell Asia FX' might capture it too. Dominos are falling across EMFX and that process can remain fairly disorderly.”
He sees that soft domestic demand, weak trade, no inflationary pressure. Q2 will see GDP growth slow. Further, he notes that Wei Lao's commentary is becoming very downbeat, verging on downright scary. He feels that it is simply bad news for commodity markets and commodity-related currencies. Further, he writes, “Add it to the rise in US yields and it makes me highly suspicious of any bounce in EM assets. Within G10FX, AUD/USD has another 10% downside, and long USD/CAD looks a great risk-reward trade. Most of our EM recommendations are in FX too, with ZAR, PLN, HUF and RUB all ‘sells'. ‘Sell Asia FX' might capture it too. Dominos are falling across EMFX and that process can remain fairly disorderly.”