China and Emerging Markets

DBS suggests throwing away the old maxim a 1% change in US growth meant a 2% change for Asia as the region is now driving more of its own growth and can better withstand a slowing in the US economy.

The Dow reversed a 100 point fall on Friday as poor economic data cheered a market hoping for a big rate cut.

The Dow put on 180 points last night as Bernanke said nothing in Europe, the US dollar weakened, gold surged, and oil hit an all time high.

Wall Street was unsure just what clues were provided by various Fed statements last night, while a Japanese recession looks more clear.

There is little in the way of economic data to focus on in the US until Friday, and Australia is quiet as well.

The People’s Bank of China has raised the reserve requirements for banks for the seventh time this year.

A rumour hit the market late yesterday that BHP and CVRD were looking to take out Rio, while Woodside has just initiated what may be an enormous LNG deal.

The world’s second largest economy is on the brink of recession, and a strong yen is only going to exacerbate the problems. In the meantime, global commercial paper markets remain frozen.

BIS Shrapnel expects further increases in Asian construction activity in coming years with China leading the way as the migration to cities continues.

Despite the credit crunch, commodity investment instruments are holding their own.