The worries about the Chinese credit market could add to the equities markets woes and the tendency for buying the greenback as a safe haven. These worries have been increased substantially containing the market sentiment since last week with report came out of Fitch suggesting that there are accumulating risks looming the markets around the Chinese banking sector lack of transparency about that issue from the Chinese governmental side.

While the markets are waiting anxiously for interventions to come by God's will from PBOC which did not denied the risks but is still trying to calm the markets down by referring to spurring the growth at these circumstances while the inflation upside risks are still easing as we have watched Chinese CPI getting down previously to 2.1% in May from 2.4% in April while it has been foreseen to be up by 2.4%.

The gold is still struggling to have a placed over 1300$ again uselessly until now with this greenback rising across the broad trading now at 1288$.

The single currency which is eyeing on the demonstrations in Greece with long weekend has been extended for today too because of the holy spirit Monday holiday is trading now below 1.31 versus the greenback after June Germane IFO came as expected at 105.9 up from 105.7 in May while the British pound in trying to hold above its previous supporting level versus the greenback at 1.533 after opening this week on a gap trading below 1.54 after closing last week at 1.5415

The major European equities markets are down and the future US indexes are also down while these worries about the credit market are pushing the bonds yields up further adding more gains to them following the impact if the rising expectations of having a close halt this year of the Fed’s stimulating bond buying QE after the recent Fed’s meeting which dampened the both of the equities and bonds in US driving up their counterparts across the Atlantic fearing of the Fed’s withdrawing role of stimulating by buying lower amount of bonds which can hurt the growth outlook too with the current continuous easing of the governmental role for sustaining its financial deficit position.

The Fed has seen last week that the unemployment to get down to be between 6.5% to 6.8% next year and the growth to be from 3 to 3.5% next year despite the governmental spending cuts by God’s will.

 

Kind Regards

FX Market Strategist

Walid Salah El Din

Mob: +20 12 2465 9143

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