Chinese Data, UK Confidence, JPMorgan

Overnight Developments:

1. JPMorgan reported a $2 billion trading loss – that increased risk aversion.
   US bank stocks weaker – helped (JPY and USD overnight)
2. Chinese data shows harder landing at the moment.
   Also increases concerns and commodity currencies weaker.
3. UK confidence data poor, hurts GBP.

1. JPMorgan Loses $2 Billion via its Chief Investment Office

In a blow to risk appetite, JPMorgan said it will incur a $2 billion loss. That helped give a boost the the USD and JPY during the overnight session.

From Bloomberg: “Stocks and commodities fell after JPMorgan (JPM) Chase & Co. reported a $2 billion trading loss. Treasuries rose, heading for their the longest run of weekly gains since Russia’s default in 1998. JPMorgan’s Chief Executive Officer Jamie Dimon said an “egregious” failure on its synthetic credit securities led to losses in its chief investment office.”

2. China Data (April)

• CPI (Apr), at 3.4%, forecast was 3.4%.
• Industrial Production y/y: +9.3%, forecast was 12.1%, pr. 11.9% - Reflects sharper slowdown.
• Fixed asset investment (20.2% vs 20.5% expected) and retail sales (14.1% vs 15.1 expected) weaker as well.
• New loans and money supply growth slow.

Should worry those watching global growth trends (after trade data was soft) but does open up the possibility of more policy loosening by People’s Bank of China.

3. UK Consumer Confidence Slides Sharply

In a sign of weakness for the UK economy, we see consumer confidence falling by a sharp 9 points, reversing some of the positive momentum in this indicator. It could reflect that the headlines around a double-dip recession weighed on confidence and can become a self-fulfilling prophecy as households hold back on spending.

 Nick Nasad FXTIMES