The IMF has called for further action to support growth from China. An issue which will no doubt be discussed at this weekend’s G20 meeting after Chinese stocks slumped down more than 6% overnight. The US economy will be another hot topic on the G20 agenda as there is speculation that the world’s largest economy could grind to a complete halt in the first quarter. The Brexit will also be heavily discussed, any updates on these three themes will no doubt inject volatility into the market.
On the data front, we had the release of the UK’s second reading GDP and durable goods from the US. Firstly, UK GDP posted a decent 0.5% as expected. Although the growth figure has failed to change the bearish tone of the market in regards to the Pound. Durable Goods in the US exceeded economists’ consensus posting 4.9%, its best figure in a year and a half.
The week ends with mainly US data releases. The main focus will be the second reading of Q4 GDP which is forecast to drop from the first 0.7% reading to 0.4%. If this decline is seen it could put further doubt that the Federal Reserve will raise rates as the signs of an economic slowdown build up.