CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 74% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Open Account
☰
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 74% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Open Account
✖

Markets update Investors await Brexit plan B as Chinese economy slows further

Article By: ,  Financial Analyst
January 21, 2019 10:09 AM

With the US markets closed, and economic calendar fairly light, it has been a dull Monday so far. But that could all change when Theresa May unveils her revised Brexit plan to the parliament later this afternoon. Her initial Brexit plan was rejected overwhelmingly by the parliament last week in a humiliating defeat for the PM. So, it remains to be seen how she will approach the situation in light of that defeat and given that the time is fast running out. Will she intentionally run the clock down, so we are headed towards a no-deal Brexit? Or is she using the threat of a no-deal Brexit as a weapon to win more favours from the EU, but will the latter call her bluff? There are a lot of questions, but very few answers. I am hopeful that there will be some clarity by the end of the day, but honestly can’t see how she will be able to come up with a plan without ruling out the prospects of a no-deal Brexit.

Meanwhile, the latest economic data out of China confirmed what we and many other analysts had suspected: slowdown in growth. While annual GDP grew at a still-strong 6.6%, this was the lowest rate since 1990. On a quarterly basis, growth slowed down to 6.4% in the last quarter of 2018, compared to a year earlier, down from 6.5% in Q3. Growth was undoubtedly held back by China’s ongoing trade dispute with the US, which has weighed on business and consumer sentiment. However, the growth figures were in line with analysts’ expectations and although European stock markets have started on the back foot, this could be due to profit taking and concerns elsewhere including, as mentioned, Brexit. What’s more, industrial production unexpectedly grew more robustly than anticipated at 5.7% y/y. Still, the consistent slowdown in China’s economic growth is worrying nonetheless with GDP easing now for the third consecutive quarter. Some market commentators have suggested investors will be concerned that the slowdown in China and other emerging market economies may hurt growth in developed economies such as the US, and therefore weigh on company earnings. So far, there has been little evidence to suggest that may be the case, although we have seen lots of disappointing numbers from Germany and heard warnings from a couple of tech giants whose sales of high-end smartphones have disappointed in China. Those concerns already played a big part in the stock market sell off towards the end of last and start of this year, but since then investors have shown few concerns. Could that change this week?


StoneX Financial Ltd (trading as "FOREX.com") is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, FOREX.com does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date.


This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it. No opinion given in this material constitutes a recommendation by FOREX.com or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.


The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although FOREX.com is not specifically prevented from dealing before providing this material, FOREX.com does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation. For further details see our full non-independent research disclaimer and quarterly summary.


CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 74% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. CFD and Forex Trading are leveraged products and your capital is at risk. They may not be suitable for everyone. Please ensure you fully understand the risks involved by reading our full risk warning.

FOREX.com is a trading name of StoneX Financial Ltd. StoneX Financial Ltd is a company incorporated in England and Wales with UK Companies House number 05616586 and with its registered office at 1st Floor, Moor House, 120 London Wall, London, EC2Y 5ET. StoneX Financial Ltd is authorised and regulated by the Financial Conduct Authority in the UK, with FCA Register Number: 446717.

FOREX.com is a trademark of StoneX Financial Ltd. This website uses cookies to provide you with the very best experience and to know you better. By visiting our website with your browser set to allow cookies, you consent to our use of cookies as described in our Privacy Policy. FOREX.com products and services are not intended for Belgium residents.

© FOREX.COM 2025