The week begins with little activity in the market but with a risk sentiment still at low levels.
The data published this morning in China shows that although the growth of the Asian giant continues, it is losing strength with a decrease in the industrial production figure to 9.8% from 14.1% the previous month. The same occurs with the retail sales data, which grew 17.7% in April compared to 34.2% in reported for March.
This downward adjustment of the figures can be considered normal within a process of normalization of the economy. Still, in the absence of confirmation that the economies of western developed countries are once again in a normal growth scenario, any setback in China, the driving force of the global economy, may raise concerns among investors.
In any case, the main cause of concern in the markets and uncertainty continues to be that of a potential inflationary process in the United States that would force the Federal Reserve to anticipate the increases in interest rates and terminate its program to purchase assets.
The publication of the minutes of the last meeting of the Federal Reserve next Wednesday could give us some clue in this regard, although market expectations are low in this matter. The Fed is unlikely to have debated the implications of a potential inflationary spike during its last meeting. The data that will affect the market will be those of employment, and the CPI published next month.
Stock markets began with very slight losses Monday after the Japanese Nikkei index fell slightly less than 1%.
The NASDAQ index corrected higher for the last two days of last week after a crash that took it to near oversold zones on the daily chart. Now the index is moving between the 100-day SMA line that passes through 13300 and which acts as a pivot from a technical analysis point of view.
The currency market continues to behave indecisively and without a clear direction. The US dollar is struggling between the strengthening due to the expectations of interest rate hikes and the escalation of the yields of the US Treasury bonds and the weakening derived from the current policy of low-interest rates that the Fed, for the moment, intends to maintain as long as necessary to recover the full employment figures.
GOLD continues to benefit from this market situation, driven mainly by rising inflation expectations and by actual interest rates that are at low levels below -2%.
The precious metal is slightly above a significant resistance level in 1850, above which it makes its way into the 1875 zone.
Sources: Bloomberg, reuters.com.
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