There was more subdued trading with Asian stocks being mixed to lower as China released more disappointing trade data and Spanish banks received an 30 bn euros emergency package from Eurozone ministers after nine hours of emergency talks in Brussels,
China, the world’s second largest economy saw its surplus increase to $31.73bn, up 42.9% from the same month last year imports rise less than expected in June, and now standing at a three year high. eak imports which increased 6.3%, were about half of what analysts had been expecting and down from 15.3% recorded in May.
Inflation in June rose 2.2% on year in China, less than the market expectations for 2.3% increase. Last week in a surprise move, the government cut borrowing costs for the second time in a month, raising concerns China may be missing its goal of 10 percent growth in trade this year. China’s official purchasing managers’ index for June showed a contraction for the first time since January and Bejing cut its benchmark interest rates on July 5 for the second time in a month, adding to the first reduction since 2008 and the three cuts in banks’ reserve requirements since November 2011.
As fears of a global slowdown gain momentum, there was subdued trading in Asian markets with Hong Kong’s Hang Seng Index down 0.29%, Australia’s S&P/ASX200 down 0.35%, whilst Japan’s Nikkei 225 Index was down 0.27% at time of writing.
In Spain, The yield on Spanish bonds rose sharply ahead of the meeting between Eurozone finance ministers, with many fearing that little concrete action on Spanish banks would be reached. There have been fears that Spain’s troubled banks could lead the country to ask for a full state bailout. However, the 30 bn package was agreed to help the ailing Spanish banks with the money being made available to them at the end of the month, It was also agreed that a 2013 deadline for Spain to cut its budget deficit to the EU limit of 3% could be extended by one year.
The fall in stocks was mirrored in the commodities markets with Gold down 0.19% and Silver up 0.70%. However, the USD made gains, trading inversely to Gold, with the US dollar index up 0.20%.
This morning, the focus for binary traders should be on Europe with manufacturing data all released in France, Italy and the UK.
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