By Kevin Buckland

A look at the day ahead in European and global markets from Kevin Buckland

China is very much the center of attention today, following a barrage of data and remarks from its central bank chief, financial regulator and stats bureau.

Unfortunately, though, none of it served to paint a clearer picture of how exactly the world’s second-largest economy is positioned and what actually policy makers are doing about it.

The economy grew at the slowest pace since early 2023 in the third quarter, although forecast-topping retail sales potentially gave some cause for optimism. At the same time, new home prices tanked at the fastest pace since 2015.

Of course, all this is arguably old news, mostly predating the announcement of the most aggressive stimulus since the pandemic at the end of last month – even if a lack of detail in subsequent press briefings has sapped the initial momentum.

That said, the official launch today of a swap facility aimed at supporting the stock market seemed to have an immediate psychological impact, spurring a swing to gains in mainland equity markets.

The effect was not transmitted more widely, with shares in economies tied closely to China, like Australia and South Korea, performing poorly.

Robust earnings from Taiwanese chipmaker and Nvidia supplier TSMC was probably responsible for the bulk of gains in Hong Kong stocks, as well as lifting Taiwan’s equity benchmark by 2.5%.

European shares look headed for a softer open, with FTSE and DAX futures both down, although both indexes are currently on course for weekly gains of more than 1%.

UK retail sales are the biggest macro event regionally, coming just as sterling recovers from its mid-week inflation shock.

The British currency is down 0.4% for the week, looking much more robust than the euro, which is on track for an almost 1% slide after Thursday’s ECB rate cut and signals of more coming soon.

Key developments that could influence markets on Friday:

-UK retail sales (Sep)

-US housing starts, building permits (both Sep)

-Fed’s Bostic, Kashkari and Waller speak

(Reporting by Kevin Buckland; Editing by Muralikumar Anantharaman)

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