23 Oct 2013
Session Recap: Bullish data and carry-over from US overshadowed by scary Chinese debt headlines
FXstreet.com (Barcelona) - After several sleepy Asian sessions in a row, Wednesday’s session has turned out to be anything but quiet. The bullish mood that carried over from the US session did a hard 180 degree shift once news came out of China that their biggest banks would be tripling their bad debt write-offs on a year over year basis.
Chinese news blind-sides growing global bullish cabal
The news that rocked the Asian markets – at least for the very short-term - was that Industrial & Commercial Bank of China Ltd., the world’s most profitable lender, and its four largest rivals expunged in the first six months 22.1 billion yuan of debt that couldn’t be collected, up from 7.65 billion yuan a year earlier. Yes, that is a tripling of bad debt write-offs in one year.
It’s still early enough in the session for the markets to stabilize and even recapture most of the losses that occurred following the unnerving headlines. If there is not a major rebound, though, the bullish charts that were growing in numbers will be transformed to neutral / bearish charts just like that.
Trading action in the majors says “risk off” is the mood for the time being
A quick scan of the charts of the major forex futures reveals a “risk off” mode taking effect with renewed vigor. A very busy European and US session (in terms of data) are getting ready to kick off. It will take good data in both Europe and the US to possibly provide the comfort and stability needed to right the global ship. The key data due out includes: the German 10-Year Bund Auction; EU Consumer Confidence; US Monthly Mortgage Apps; US Export Price Index; and, the US Housing Price Index.
Chinese news blind-sides growing global bullish cabal
The news that rocked the Asian markets – at least for the very short-term - was that Industrial & Commercial Bank of China Ltd., the world’s most profitable lender, and its four largest rivals expunged in the first six months 22.1 billion yuan of debt that couldn’t be collected, up from 7.65 billion yuan a year earlier. Yes, that is a tripling of bad debt write-offs in one year.
It’s still early enough in the session for the markets to stabilize and even recapture most of the losses that occurred following the unnerving headlines. If there is not a major rebound, though, the bullish charts that were growing in numbers will be transformed to neutral / bearish charts just like that.
Trading action in the majors says “risk off” is the mood for the time being
A quick scan of the charts of the major forex futures reveals a “risk off” mode taking effect with renewed vigor. A very busy European and US session (in terms of data) are getting ready to kick off. It will take good data in both Europe and the US to possibly provide the comfort and stability needed to right the global ship. The key data due out includes: the German 10-Year Bund Auction; EU Consumer Confidence; US Monthly Mortgage Apps; US Export Price Index; and, the US Housing Price Index.