London pre-open: Markets brush off weak Chinese trade data

9th Nov 2015 07:58

(ShareCast News) - Investors were set to push the Footsie higher despite the release of weaker than expected foreign trade numbers out of China over the weekend and a strong US jobs report for October, last Friday, that led markets to re-price the likelihood of a Fed hike next month.The top flight index was being called to start the session up to 19 points higher from Friday´s closing level of 6,353.83. In parallel, the Shanghai Stock Exchange´s Composite Index gained 1.58% or 56.85 points to reach 3,646.88.China's exports fell 6.9% year-on-year in October while imports dropped by another 18.8%. Economists had penciled in year-on-year declines of 3.2% and 15%, respectively."Friday's jobs report did not just prompt an increased pricing in of a December rate hike, we also saw the odds for a second hike in April rise quite significantly as well. The prospect of recurring hikes could be what makes emerging market investors nervous once again.Another poor batch of trade data overnight appears to have done nothing to shake investor confidence in China, despite a significant drop in both imports and exports being behind the record trade surplus. Other countries in the region haven't shaken this off so well given that they depend heavily on China for trade but maybe the possibility of more stimulus from the People's Bank of China on the back of this is enough to keep investors happy," Craig Erlam, senior market analyst at Oanda told clients."The yuan is now back at the levels it was against both the euro and the Japanese yen prior to August's devaluation, making Chinese exports much more expensive in its two biggest export markets. In this year alone exports to Japan have declined 9%, and to the EU they have declined 3.7%."This suggests that it seems likely that at some point Chinese authorities may have to take further steps to ease policy further, with potentially another move in the US dollar peg likely in the coming weeks, and months," added Michael Hewson, chief market analyst at CMC Markets UK.IHG not studying either a sale nor a mergerInterContinental Hotels responded to recent market speculation on Monday, saying it is not considering a potential sale or merger of the company. On Friday, shares in the company surged following a report it was mulling the possibility of a sale or merger. Bloomberg cited people familiar with the matter as saying that IHG is in discussions with financial advisers about whether to sell itself or merge with a competitor as the sector consolidates.Singapore Airlines will deploy Inmarsat's GX Aviation service on its long-haul fleet starting next year. The FTSE 100 mobile satellite communications services announced the deal on Monday. GX Aviation delivers high-speed broadband over its Global Xpress satellite network. It will first be installed on the airline's Boeing B777-300ER aircraft in the second half of 2016, followed by its Airbus A380-800s and A350-900s. It is the second major airline the company has signed a deal with in the last month, after securing a 10-year contract with Lufthansa in October to provide the service.National Grid has filed a request with the Massachusetts Department of Public Utilities to update its electricity distribution rates. The company said it was the first time since it has filed such a request, which will impact all electricity companies operating in the state if it is approved. National Grid is requesting an increase of around $143m (£95m) a year in electricity delivery revenue to cover increased operating costs and investments made in its electric delivery network.