Monday, April 2, 2012

China and Europe

- Chinese PMI came in 53.1 vs 50.8 expected and 51 previously - this should allay some China fears.  The market is still expecting a china easing - this will bode well for commodities after being sold off in the last week and China being sold down 8 consecutive days - this seems to be a divergence (and perhaps warning) from the US market.
- This comes as China continues to deal with fallout of Bo Xillings removal from the political scene.

- Europe's 17 nation eurozone agreed to deliver E500bn in new bailout funds -erecting a firewall big enough to contain the crisis and also encouraging IMF member to commit similar sum to emergency reserves.

I think we will grind higher this weak, and if we see a China turnaround in price action from last week, we should be positioned clearly in cyclicals.  Gold may have been done with it's selling, and may start it's trend higher this week.