Continuing from our theme from last week about concerns in China and the falling of the FX reserves to its lowest levels since 2012, the PBOC chief Zhou Xiaochuan was quoted in an interview stating that there is no basis for continued depreciation of the yuan because the balance of payments is good, capital outflows are normal and the exchange rate is basically stable against a basket of currencies. Zhou dismissed speculation that China plans to tighten capital controls to stop the falling of FX reserves stating that China has ample holdings for payments and to defend stability.
gold rebounds as investors look for safe haven
Spot Gold was trading on the spot market at USD 1056 on 27 November last year. As of last Friday spot gold soared to USD 1237, a rise of 17%. Gold is now trading at an eight month high due to the continuing concerns in global stock markets particularly in China. Chinese investment in gold have increased by 25% in the last quarter of 2015 and with global stock market rout in the start of 2016, investors are relying faith on the metal as a safe haven investment.
market data update
| Australia Cash rate Australia 90 day bank bill Australia 10 y bond US 10y Govt bond AUD/USD AUD/EUR AUD/JPY AUD/CNY ASX 200 S&P 500 Dow Jones Shanghai Composite Brent Oil (USD per BBL) Gold Spot (USD per oz) | AS AT 12 FEB 2.00 2.28 2.42 1.75 0.7104 0.6288 80.08 4.6704 4698 1864.78 15973.84 2763.49 33.36 1237.29 | AS AT 5 FEB 2.00 2.235 2.54 1.86 0.719 0.6423 83.91 4.7221 4971.2 1880.05 16204.97 2763.49 34.01 1167.94 |
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