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China Stocks Bottom?

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Number one:

The war in Ukraine. Peace talks are apparently getting closer to a ceasefire, with the FT reporting a 15-point plan to end the fighting has been drawn up. That has been supporting a rally in risky assets and a decline in havens like gold over the last week. If nothing comes of the talks in the next week, traders might look for dip-buying opportunities in gold and sell the equity bounce.


Number two:

The fate of Chinese stocks. High profile Chinese stocks, including Alibaba and Tencent saw huge declines last week after thousands of new covid cases were reported in China, prompting a lockdown encompassing almost 50 million people in the tech district of Shenzhen. The stocks then saw a huge rally, recouping the losses on the promise of measures to stabilise markets from Beijing, potentially signalling a bottom.


Number three:

The SNB rate decision is on Thursday. No fireworks are expected from the Swiss National Bank, which has been tracking ECB policy for years. However, with skyrocketing inflation and a war on the Eastern flank of Europe, there is the chance of a surprise move towards tightening, which could strengthen and already strong Swiss franc.


Number four:

The key price levels to watch. Dollar-yen has been the top FX riser and the 120 big level is resistance. Pound-dollar has bottomed for now at 1.30, which is support. Euro-dollar needs to pick a direction around 1.10. 100 is key support for Brent crude, 1900 is major support for gold and the February low is still the big one for the S&P 500.


Number five:

As far as economic data, I will be watching German PPI on Monday, A speech from RBA Governor Lowe on Tuesday, UK inflation and the UK budget on Wednesday, Eurozone, UK and US PMI data as well as durable goods orders on Thursday and then UK retail sales and Germany IFO on Friday.



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