China or the US, who is No. 1?
The Governor of the Bank of Japan, Haruhiko Kuroda, is set to deliver a speech.
The Bank of Japan conducts an ultra-soft monetary policy, and does not plan to change this in the nearest future. As a result of this speech, market participants are likely to receive confirmation in the sequence of actions of the Bank of Japan, which in turn will convince speculators to bank on the weakening of the Yen.
The producer price index in Germany should not bring any surprise. Most likely, the publication of these statistics will have little effect on the EUR/USD currency pair.
Volatility in the European currency should be expected following the declaration of independence of Catalonia. Politicians have not yet voiced any options that will allow the situation around Catalonia to normalize.
The Consumer Price Index (CPI), which is being released in Canada, is able to force speculators to buy the Canadian dollar against the US dollar more actively, should a higher ratio be published.
Currently, perhaps the most important and interesting information comes from China. Over the past few years, China's economic growth indicators have been slowing down, and this event has drawn much attention at the congress of the Communist Party of China.
China's banking regulator said it was going to give foreign capital easier and more substantial access to the banking sector. This statement by the regulator is primarily aimed at deeper internationalization of the Chinese yuan (CNY), as in the past few years, international settlements in China's national currency have been steadily declining.
Many market participants believe that the main driver of the movement in the stock and financial markets is China, and the decisions of the Fed are taking to the back burner. Currently, such views may seem premature, however, if China implements its economic plans, such as: building the Chinese "Silk Road", simplifying the access of foreign capital to the banking sector, carrying out the internationalization of the yuan, increasing the volume of goods with high added value, then China will be, according to all indicators, the number one economy.
At present, China is 30% of the world's economic growth, and to increase this figure, it is necessary to transfer a significant part of the international settlements to the yuan.
The main conclusion that can be drawn is that China intends to increase its share in global GDP, and it looks like it has all the chances to fulfil its plan. For global stock markets, this is a powerful positive development. Time for global shorts has not come, and local corrections will be a good moment to enter the market. We wish you profitable trading!
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