In the early afternoon in Hong Kong, the MSCI Asia Pacific regional index lost 1,2%. Concerns about an imminent reduction in monetary stimulus have resurfaced after the release of US labor market data, while fears about monetary tightening in China continue.
However, both fears seem exaggerated: that relating to China because the authorities are simply trying to slow down a growth that is straining an immature financial system; as in the case of the USA in 2007, a 'shadow banking system' has been growing which is even bigger than the official one. To prevent the damage that plunged the US and the world into the Great Recession from emerging further, Chinese growth must slow down. In the case of the US, Friday's data was less brilliant than it seems: particularly if the unemployment rate remained unchanged, all other measures of labor slack worsened, making it less likely that the stimulus will be reduced soon.
Meanwhile, the dollar is gaining again: the euro is just above 1,28 and the yen remains well above 100. Gold is unable to maintain the levels of recent days and falls back to 1218 $/ounce. Oil still climbs to 103,6 (WTI) for geopolitical reasons, but other commodities – metals – lose ground.
http://www.bloomberg.com/news/2013-07-07/hong-kong-australia-equity-futures-drop-on-fed-tapering-concern.html http://www.bloomberg.com/news/2013-07-07/abe-to-defy-history-in-stocks-rally-after-vote-chart-of-the-day.html http://www.bloomberg.com/news/2013-07-08/india-s-rupee-plunges-to-record-as-fed-risk-may-worsen-outflows.html
