US futures and European markets are trading higher once again after a record close by the S&P on Wall Street last night. The Chinese economic data- which came out at a much better level than anticipated has also helped the trader’s appetite for riskier assets.
The Chinese GDP for the third-quarter came in at 7.8% which was well above from the previous quarter’s reading of 7.5% and thus, confirming that the growth in the country is on the right track. However, the retail sale number for the country did raise some eyebrows when it came in at 13.3%; on a softer side and below expectations of 13.5%- given that the country is trying to boost its domestic consumption.
Considering that we have overcome the inconsiderable obstacle of the US debt ceiling with a temporary fix in place but no firm solution in place or within sight, we are definitely not out of the woods yet. The president Barack Obama has said that he will try to avert such a situation when the circus does return to the capital in January, but the hopes for such prospect are extremely bleak and this could keep the consumer to be very cautious as we head towards the end of this year.
Therefore the main focus amid investors is towards the Q3 earning and the outlook for Q4. As the shutdown has cost nearly $24billion for the economy, the challenges which Fed will face, will not only be limited to the unemployment rate, repairing the reputation & economy, but also perhaps preparing to accommodate for the debt ceiling circus which will return in February. Therefore, loose monetary policy could possibly be in place for some time perhaps at-least Janet Yellen takes over which is pushing the gold higher.