Investors have so far been disappointed by the lack of response from China, a sign that is reflected in the country’s stock markets that have weakened in recent weeks. At the same time, economists cut estimates of economic growth for this year.
According to a group of 62 economists consulted by Bloomberg, Chinese Gross Domestic Product (GDP) will grow 4.9% instead of the previous estimate of 5%while the bank BNP Paribas lowered its projection from 4.9% to 4.5%.
Yuan
The Chinese yuan extended its losses on Friday to hit a nine-month low against the dollar and posted his worst week in yearswhich raised questions about whether the authorities are allowing its weakening to cushion the strong economic slowdown in the country.
The US Federal Reserve’s stance and mounting economic pressures pushed the yuan to its lowest level since July. Many of China’s largest cities, including Shanghai, are in lockdown due to Covid-19.
“The macro outlook for China and the yuan has certainly changed significantly in recent weeks due to Covid-driven lockdowns and disruptions in large parts of the country, especially Shanghai,” said Alvin Tan, Asia FX Strategist at Royal Bank. of Canada.
However, toSome stakeholders are “pretty happy” with the yuan’s weakness, which could ease pressure on Chinese exporters suffering from lockdowns.operators said.
“Export growth is likely to slow down so allowing some yuan weakness at this point is fine,” a Chinese bank trader said.
Petroleum
Oil prices closed lower this Friday, seeking a sustainable recovery at a time when the confinement in Shanghai is prolonged due to the coronavirus pandemic, raising fears over Chinese demand for crude.
“These Chinese lockdowns are a serious blow to global demand, we must bear in mind that China is the world’s leading importer of crude,” Han Tan, an analyst at the firm Exinity, told AFP.
It is a toxic cocktail for oil demand “at a time when China slows down, while the United States increases its interest rates”, added Stephen Innes, an analyst at SPI AM.
european bags
European stocks closed at a one-month low on Friday as a cocktail of negative factors, from the Covid-19 lockdowns in China to concerns over rapid interest rate hikes, dampened sentiment around the world. .
The pan-European STOXX 600 index lost 1.8% to 453.43 points, its lowest level since March 25. The commodities sector, which is home to global miners such as Glencore and Rio Tinto, fell 3.6% as Metal prices were affected by the lockdowns in China, the main consumer of metals.
metals
Copper hit a one-month low on Friday, while most industrial metals fell on concerns that rapid monetary tightening and a lockdown in China will depress economic growth and demand.
Benchmark three-month copper on the London Metal Exchange (LME) fell 1.8% to $10,097 a tonne, a floor since March 17, and added a third weekly decline.
Shanghai’s industrial output plunged in March, its first monthly decline in two years, after strict lockdown measures halted production at some factories.
“We have multiple factors weighing on copper and the other metals, particularly from a macroeconomic standpoint, such as growing concerns about a potential US recession,” said Wenyu Yao, chief commodities strategist at ING Bank.
“Initially it was going to be a hard lockdown in Shanghai, but it’s been a month now and no one knows when it will end. That’s another big concern.”Yao said.
Source: Ambito
David William is a talented author who has made a name for himself in the world of writing. He is a professional author who writes on a wide range of topics, from general interest to opinion news. David is currently working as a writer at 24 hours worlds where he brings his unique perspective and in-depth research to his articles, making them both informative and engaging.
