Brief: China Grows 4.9%, Brexit Stuck, Covid Surge, Commodities Gain

Summary:

Asian stocks are mostly higher following GDP data from China, which showed a 4.9% rise for the third quarter for the Chinese economy.

Asian stocks are mostly higher following GDP data from China, which showed a 4.9% rise for the third quarter for the Chinese economy.. This was slightly lower than analysts’ expectations of 5.2%.

Hong Kong’s Hang Seng gained 0.5% while the Shanghai Composite SHCOMP slipped 0.8% and Japan’s Nikkei rose 1.1%. Chinese share losses were attributed to the GDP data, where traders saw less chance of further stimulus.

The Chinese numbers have boosted global stocks with the U.S. Dow Jones index up 150 points, or 0.53%.

Brexit Stalemate, Covid Surge

The EU summit ended on Friday with no agreement between the European Union and the U.K. Boris Johnson told businesses on Friday to “prepare for No Deal,” with officials stating that the talks are over unless the EU has a “fundamental” change of position.

Coronavirus cases are back on the rise in Europe with Italy seeing a fresh introduction of restrictions and this should dampen any enthusiasm in stock markets as investors worry about the effects to global growth. The new measures include 9 p.m. curfews at public squares, whilst restaurants and bars will be limited to only table service after 6 p.m.

U.S. markets will react to earnings from IBM today, however, the big releases this week are from Netflix and Tesla, who will both be looking for a strong third quarter in order to hold onto impressive 2020 gains.

Commodities Higher

Commodities have gotten a boost from the Chinese economic data with gold up 0.5% and crude oil higher by 0.7%.

Forex markets will have headline risk attached due to a host of speeches today, including comments by Federal Reserve chair Jerome Powell, and European Central Bank head Christine Lagarde. The U.S. dollar was boosted by strong retail sales figures on Friday, whilst the EU saw inflation come in as expected at 02%.

FTSE 100 Technical Outlook

The FTSE 100 has found support around the 5,785 level and is now testing the 6,000 resistance. A bullish close could see the market move to test the 6,400 level, where the 50 moving average also resides on a weekly basis. A close below 5,785 will open the door to a retest of the lows.