Morning Briefing: Markets rise on Chinese GDP

Markets rise on Chinese GDP... IMF sounds further warning on global economy... Oil to remain oversupplied for most of 2016...

Steve Randall
Markets rise on Chinese GDP
China’s GDP figures have prompted a rebound for oil prices and global equity markets so far Tuesday.

While the data was not remarkable, falling broadly in line with expectations, there was relief that the figures were not worse than expected. GDP for the fourth quarter was up 6.8 per cent while whole-year growth was 6.9 per cent. Both of these figures were lower than their 2014 counterparts. Additional data on industrial output and retail sales were also weaker than in 2014 but not far off expectations.

Asian markets have closed higher with Shanghai up 3 per cent and Hong Kong up 2 per cent.

The higher sentiment has spread to Europe with major indexes climbing around 2 per cent. Inflation figures for the UK showed a 0.2 per cent rise, some way short of Mark Carney’s 2 per cent target.

Wall Street is expected to open higher after a holiday Monday and Toronto is also set to gain after a weak finish in the previous session.

Oil prices have gained on expectation of stronger demand from China.
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North America (previous session)
US Dow Jones 15,988.08 (-2.39 per cent) -6.66 per cent -8.70 per cent
TSX Composite 11,942.17 (-1.09 per cent) -8.31 per cent -16.56 per cent
Europe (at 5.30am ET)
UK FTSE 5,873.73 (+1.62 per cent) -2.95 per cent -10.81 per cent
German DAX 9,708.24 (+1.96 per cent) -8.48 per cent -5.21 per cent
Asia (at close)
China CSI 300 3,223.13 (+2.95 per cent) -14.46 per cent -3.94 per cent
Japan Nikkei 17,048.37 (+0.55 per cent) -10.21 per cent +0.20 per cent
Other Data (at 5.30am ET)
Oil (Brent) Oil (WTI) Gold Can. Dollar
(+3.82 per cent)
(+1.22 per cent)
(-0.29 per cent)
Aus. Dollar
IMF sounds further warning on global economy
The International Monetary Fund has released an updated outlook for the global economy this morning. It’s the third outlook the IMF has made in the last 12 months and shows a downward revision of 20 basis points for 2016 and 2017 to 3.4 per cent and 3.6 per cent respectively. The report warns that China’s growth is set to slow to 6 per cent by 2017 and remains a risk to the global economy. The US economy is also predicted to grow at a slower pace than previously forecast, with the strong dollar curbing gains to 2.6 per cent for the next 2 years.
Oil to remain oversupplied for most of 2016
The global oil supply glut will continue until late 2016 at the earliest according to the International Energy Agency. In its latest outlook Tuesday, the agency noted that warmer winter weather had cut demand to 1 million barrels a day, less than half that of the third quarter of 2015. The IEA estimates that Iran will add 300,000 barrels per day to the market by the end of this quarter, less than the half a million barrels that Tehran has said.