Chinese stock market is under necessary adjustment, according to IMF 23-Aug-2015

It has been mentioned in the last post, whether too soon to call the situation as Crisis. Yesterday, IMF said economic slowdown and stock market falling are necessary adjustment.

Reuters >> IMF official says 'premature' to speak of Chinese crisis

China's economic slowdown and a sharp fall in its stock market herald not a crisis but a "necessary" adjustment for the world's second biggest economy, a senior International Monetary Fund official said on Saturday.

Fresh evidence of easing growth in China hammered global stock markets on Friday, driving Wall Street to its steepest one-day drop in nearly four years.

"Monetary policies have been very expansive in recent years and an adjustment is necessary," said Carlo Cottarelli, an IMF executive director representing countries such as Italy and Greece on its board.

"It's totally premature to speak of a crisis in China," he told a press conference.

Even though the stock market has fallen sharply, the stock index, such as SSE Composite Index, is above the level at beginning of 2015. Numeric figure also implies it is premature to say "Crisis".


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Too soon to call it "Crisis"? 22-Aug-2015

SSE Composite Index in CNY and USD

Stock price has steeply gone down in major economic zones in the world, lead by Chinese market, followed by such US, UK, Western Europe, Asia and Pacific.

Without particular events, such as Sub-prime loan crisis or Lehman crisis, the crisis is defined after the stock market crashed into bottom. Although the stock market has plunged sharply, in SSE Composite Index, the current level is still almost same or slightly above the level at the beginning of this year.

This is both in CNY and USD.

S&P/ASX 200 in AUD and USD

It means, even though CNY itself has been devalued this month, the stock index is still higher than the value at beginning of the year.

However, looking at Australian stock index S&P/ASX200, the level is already record low within last 4 - 5 years in USD, while it is still above the level at beginning of 2015 in AUD. This is because of weakness in AUD in last 3 years.

The stock market is highly correlated as realized last October or movement in this month.

CITY A.M. >> Chaos on European markets as FTSE 100 tumbles, while S&P 500 crashes below 2,000 points

There still seems be room where Chinese stock market is going down, the correlation could bring more chaos into other economic zones than China itself.

See Stock indexes for other economic zones.

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EURJPY Trend & momentum 11-Aug-2015

Expectation of Greek deal bring positive sentiment into the market, and EUR has been steady for last days. In Asia and Pacific market, since CNY (CNH as offshore) was devalued as poor economic figure, AUD also became weaker, which implies Australian dependence on Chinese economy.

Reuters >> China devalues yuan after poor economic data

The trend and momentum indicates EURJPY is expected downward trend in a coming week while EURJPY have been steeply going up by now.

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[Android App] Trend & Momentum universal time chart released as Beta version 9-Aug-2015

Since we realized some of users were unable to see the universal time chart on App, new universal time chart has been live today.

Although it is still beta version, most of users should be able to see the chart now. We continue to improve it for our mission help people to thrive with Forex trading.

[New Universal Time Chart in Beta version]

AUDCAD Trend & momentum 7-Aug-2015

AUDCAD has been upward trend since last interest rate decison by RBA. On the other side, CAD had been weaker againt other currencies after the unexpected rate cut with concerned statistical figure last month.

In the mean time, the trend and momentum indicates AUDCAD will be downward trend in a coming week, implying bounce back from the upward trend.

[GBP] Monetary Policy Committee Announcement and Minutes by Bank of England 6-Aug-2015

>> Earlier tweet by QROSS X

Today's noon in UK time, Bank of England will have Monetary Policy Committee Announcement and Minutes.

Although the interest rate is expected at 0.50% unchanged, expectation of future interest rate is another key factor at the minutes as votes for rate rising can be more than last committee.

By the way, the trend and momentum in GBPAUD indicates it continues upward trend in a coming week.


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GBPAUD Trend & momentum, RBA announcement 4-Aug-2015

GBPAUD has massively gone down while AUD became bullish against other currencies, as RBA announced holding the interest rate at 2.0% as well as removal of the sentence demanding cheaper AUD.

The Australian >> Reserve Bank holds official cash rate steady at 2 per cent

It implies AUD will be stronger in longer term as the policy changed.
By the way, the trend & momentum in GBPAUD indicates further downward trend in coming days.