Chinese data overnight has given some mixed signals but whilst the headline growth figure for Q4 coming in just above expectations at 7.3% when it was expected to decline to 7.2%. What was also mildly encouraging was the rise in industrial production and retail sales in what could be the first indication of lower oil prices feeding through to business and consumers in an economy that is hugely affected by the price of oil. This hasn’t done much to support crude prices however which are just in the red this morning with Brent trading at 48.50 at the time of writing, having struggled to maintain a return back above $50 at the end of last week. A stimulus from lower oil prices will feed through to the global economy in the coming months, despite what the IMF has said earlier this morning whose track record for economic forecasting hasn’t been the best, so the decline in oil looks to have slowed for now.
The euro however remains the focus as we build up to Thursday’s ECB meeting and then the Greek General Election this week end. The single currency has bounced slightly from last Friday’s low of 1.1460, trading at 1.1585 this morning where we will focus on the ZEW Survey releases for Germany and the Eurozone, both are expected to rise from December so we could see this little euro bounce remain supported as we head into the two major risk events ahead.