The previous meeting of China’s legislature disappointed investors who had hoped for a massive stimulus to boost domestic demand and curb deflation.
Investors were mostly disappointed that Beijing introduced a 10-trillion-yuan ($1.4 trillion) program to deal with local government debt, but provided no new incentives to support consumption.
Data from China released over the weekend highlighted an urgent need for additional efforts to support economic growth. Consumer price index remained close to zero, while selling prices kept falling. Rating agencies downgraded China’s GDP growth forecast for 2025 after Trump’s election, expecting a rise of “around 4%” in 2025 and a “much lower” pace in 2026.
Foreign direct investment fell by nearly $13 billion over the first nine months of the year, a sign that some investors have remained pessimistic even as Beijing introduces stimulus measures aimed at stabilizing economic growth.
Some market watchers say China is likely to retain policy space to be prepared for unfavorable trade conditions once Trump takes office in 2025. At a briefing on Friday after the Standing Committee of the National People’s Congress meeting, Finance Minister Lan Fuan promised a tighter fiscal policy next year.
The revised growth forecast lowers expectations of a potential rise in commodity demand, including oil.
The Brent price after such news headed downward and is now trying to break through the level of $73 per barrel, and it is likely to succeed.
The technical target of this movement is seen as the level of $72.8 per barrel.
The overall recommendation is to sell Brent oil.
Profits should be taken at the level of 72.80. A Stop loss could be set at the level of 74.00.
The volume of the opened position should be set in such a way that the value of the possible loss, fixed with the help of a protective Stop loss order, is no more than 1% of your deposit funds.
