CHINESE worries, geopolitical tensions, falling oil numbers, weak trade figures. 2016 seems to have begun as a continuation of 2015. If the old saying "as January goes, so goes the year" holds true, then investors ought to be worried.
The trading year began with a near-7% fall (and trading suspension) on the Chinese stock market, triggered by some weak economic data and by some investors trying to get out of the market before the expiry of a selling ban (imposed as part of the summer crisis). Then on January 5, the Chinese authorities injected money into the financial system and hinted that the selling ban might be extended. But today attention has shifted to the yuan, which was allowed to weaken; some commentators fear the Chinese might devalue their currency more substantially in response to economic weakness. This would send another deflationary shiver round the globe. (There has been much talk that China's economy is shifting from manufacturing to services but the purchasing managers' index for the services sector dropped to a 17-month low.)
North Korea's claim to have tested a hydrogen bomb may be prompting scepticism...Continue reading
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