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Market Buzz: Chinese macro data to drive floors

Market Buzz: Chinese macro data to drive floors
With little news expected from Europe and the US on Monday, macroeconomic data from China is expected to be the main driver of global markets on Monday.

The Asian economic powerhouse is expected to release data on retail sales, industrial manufacturing and April’s urban investment figures. “Forecast readings are shadowing forth a slight growth for all of the free indicators,” Investcafe analyst Darya Pichugina said, adding that some analysts are not quite so optimistic.

“There’s no visible improvement in the macro situation,” analyst Liu Guangming of Beijing’s Dongxing Securities Co. said, according to Bloomberg.

China’s overall economic performance has been largely disappointing: Despite recent trade figures showing an improved economic climate, fears persist of a downturn in the world’s second-largest economy.

In April, Chinese exports rose 14.7 percent year-on-year and imports increased 16.8 percent, both outperforming analyst expectations, the People's Republic Customs Administration reported last Wednesday.  However, Citigroup economist Ding Shuang warned that the improved figures may be reflecting “over-invoicing [by exporters].”

China also faces a brutal GDP forecast in 2013. In March, China’s projected GDP growth was cut from 7.9 percent to 7.7 percent, due to weak global export demand. April manufacturing data was also disappointing, with an HSBC report on the service sector showing its weakest expansion since August 2011.

Across Asia, Japanese shares are trading higher on Monday, with the Nikkei 225 gaining 1.24 percent; floors in Hong Kong and Shanghai are currently closed.

Russian stocks closed Friday’s session in the red, with the RTS falling 1.54 percent to 1,429.78 and the MICEX declining 0.47 percent to 1,426.25. A sharp cut in economic forecast for Russia issued by the European Bank for Reconstruction and Development (EBRD) on Friday could be one of the main reasons the selloff on Russian floors, Investcafe analyst Anna Bodrova explained. The EBRD revised its forecast for the Russian economy, predicting GDP growth of 1.8 percent in 2013 – a sharp downgrade from the previous forecast of 3.5 percent.

European markets finished higher on Friday, with French stocks leading the region. The CAC 40 was up 0.64 percent, London's FTSE 100 added 0.49 percent and Germany's DAX gained 0.19 percent to close at a record high of 8,278.59 points.

North and South American markets have traded mixed recently: The S&P 500 and the Dow Jones remained above key psychological levels last week – 15,000 and 1,600, respectively. The Nasdaq rose 1.7 percent for the week, and the Latin American Bovespa lost 0.61 percent.