Mar 4, 2016 | Investment Advice

International News (Issue 389) – 4 March 2016

Being the start of the month there was the usual slew of economic data released worldwide, in this case for February.

Chinese manufacturing activity remained in the doldrums and service sector activity also somewhat worryingly continued to slow its pace of growth.

I am watching for Monday’s release of the Chinese Foreign Reserve figure since this has been a lightning rod for concerns surrounding the potential for a more broad Chinese currency collapse.

We also have the annual National People’s Congress meeting commencing this weekend in Beijing.

On the positive front for China, the Peoples Bank of China again lowered Reserve Ratio Requirements within the banking sector, freeing up liquidity for the economy.

I’m not convinced this is anything other than a moderate pressure release and certainly not a game-changer in policy terms, but was seen as a modest positive this week.

US manufacturing activity improved in February after a pretty soft end to the year. That is encouraging, as is the continued growth in employment – the February ADP release suggested tonight’s payroll figures should see another 200,000 new jobs added.

Elsewhere in the world, we were taken by the massive rally in Brazilian investment markets on the combined comfort of rebounding oil prices and, more specifically, the suggestion of Presidential impeachment of the much-hated Dilma Rouseff.

Brazilian shares are up 25% in little over a month, having lost 40% through the second half of 2015.

Also of note, in Japan this week we saw the first auction of Japanese 10-year government bonds at NEGATIVE interest rate.

That’s right.

Investors took the opportunity to give the Japanese government money with the prospect of receiving less back.

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