Big News Out Of China
January 21, 2016
Dennis Gartman has been directly involved in the capital markets since 1974 and has been publishing his daily commentary, The Gartman Letter, since 1987. Mr. Gartman is a strategic partner with the AdvisorShares Gartman Currency Hedged Gold ETFs (GEUR & GYEN) and lends his institutional insight to educate advisors and investors about trading gold in different currency terms.
“Dollars” are firmer on the forex market and the Yen… which has been strengthening of late has fallen a bit… has actually weakened as the long standing carry trades put into place over the course of the past several years where equity positions were funded with Yen were being unwound previously but for the moment that “unwinding” has stopped.
The Yen had been strengthening not because of the validity of Yen’s inherent strength or because of the supposed or real strength of the Japanese economy but because of the concerns about the validity of the global equity market had risen to the fore. However, for the moment that has stopped; the global equity markets are rebounded… sharply while the US began with strength that has since wavered; buying has replaced selling and the investment world is taking a collective deep breath… one that is actually somewhat overdue.
The “Big News” economically in the past twenty-four hours was of the long awaited news from China of its year-on year GDP growth. It was reported by the National Bureau of Statistics to have been +6.9% and although this was the slowest annual growth in the Chinese economy since 1990 it was reasonably in line with expectations of +7.0%. According to the NBS, the preliminary estimate for GDP was 67,670.8 billion yuan, or approximately $10,300 billion, for the year.
The NBS said, regarding the economy that in 2015, faced with complicated international environment and increasing downward pressure on the economy, the Central Party Committee and the State Council have maintained the strategic focus, comprehensively arranged both domestic and international tasks, adhered to the general work guideline of making progress while maintaining stability, actively adapted to and led the new normal, guided new practices with new theories, strived for new development with new strategies, innovated macro-regulation, deepened the structural reform and pushed forward mass entrepreneurship and innovation… [and] as a result, the economy has achieved moderate but stable and sound development.
We shall argue simply that it is good to have this number out-of-the-way, for the market has been focusing almost too much upon it and now that it is out and is reasonably within the target of what had been hoped for we can move on to more important concerns… and so we shall.