In the US shutdown, but the stock market is filled with optimism
Asian markets on Friday morning started to rise after the report on progress in trade negotiations between the US and China. As a result, the blue-chip index of Shanghai stock exchange China A50 increasing from the beginning of day more than 2%. In addition, there is a pattern of behavior, when the us markets are redeemed at the end of the trading session. S&P500 and China A50 futures climbed to highs since mid-December: 13.5% and 8%, respectively, during a sharp rally since the beginning of the year.
Despite the fact that the statistics of China indicates the existence of problems, but in the U.S., the longest period of suspension of work of the government, the stock markets are full of optimism. Faith in a happy future supports the abrupt softening of tone from fed officials and the ECB, and the Bank of Japan maintained a bias towards soft policy due to low inflation pressure.
Another indirect factor is the increased oil production. It rises amid signs that OPEC will+ fulfill the agreement to limit production. A sharp collapse of quotations in the end of the year was an obstacle for stock markets, supporting the mood on the reduction of risk-weighted assets. This is despite the fact that in the medium term, cheaper oil spurs economic growth.
A significant part of the statistics of the USA was postponed due to the shutdown of the government, however, published data are encouraging. The manufacturing index Philadelphia fed interrupted the series of reduction, and the application for applying for benefits fell for a second week in a row. Because of the shutdown we do not see reports on retail sales, trade balance and housing starts.
Observers note that the government shutdown is seriously hurting consumer spending. Scheduled to be published consumer confidence index from the University of Michigan will help to lift the veil of secrecy over the mood of the population. In addition, the fed will release its assessment of industrial production, which will be one of the few pieces of the puzzle of information on the economic trends in the country.