Better than forecast German trade data and a surge in US January retail sales saw global investors continue the surge that originated in China yesterday. The optimism flowed into oil and steel markets, although ongoing support for bonds and gold suggests not everyone is convinced. The US dollar weakened slightly in calm currency trading.

The 2% lift in Shanghai yesterday helped undo damage caused by last week’s falls, pointing to moderating fears around China / US trade issues. German industrial production numbers showed a slump in January. However this was neutralised by upward revision of the December numbers, and surprising strength in both import and export activity helped the DAX to a 0.75% gain.

Similarly, when US retail sales numbers showed January growth at 1.2% against forecasts centred around 0.6% it allowed US markets to view Friday’s weaker job numbers as a “Goldilocks” scenario. That is that growth is weak enough to keep interest rates on hold but strong enough to bring ongoing economic expansion. The Nasdaq led stocks higher with a 2% jump.

Asia Pacific futures markets indicate gains of 0.5% to 1% at today’s open. More defensively positioned local currencies and stronger commodity prices could see investors favouring stocks listed in Singapore, New Zealand and Australia.

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