Global stocks gripped by risk aversion, China GDP disappoints

It has been a turbulent trading week for stock markets as trade worries, global growth fears, Italian budget concerns and geopolitical tensions led to a deterioration in risk sentiment.

Although global equity bulls made an appearance mid-week thanks to upbeat US corporate earnings, this was short-lived after hawkish Federal Reserve minutes reinforced expectations of higher US interest rates. With geopolitical risks likely to promote risk aversion, investors should fasten their seat belts as global stocks may have more instore for a rough and rocky ride downhill.

Asian shares were mostly mixed this morning after China’s GDP growth for the third quarter of 2018 printed below market expectations.

The risk-off vibe from Asian markets could infect European shares this morning and trickle back down into Wall Street later in the afternoon. trade tensions with the United States weighed on the economy. With the growth outlook for China looking discouraging as US tariffs take effect, this is certainly bad news for emerging markets – especially those with a strong economic reliance on the nation.

When China sneezes, it is not only emerging markets that will catch a cold but the rest of the world. Further signs of a slowdown in economic momentum is likely to compound risk aversion, ultimately

impacting global sentiment. the Dollar since Monday. Easing tensions between the United States and Turkey following the release of American pastor Andrew Brunson could be a likely factor behind the Lira’s appreciation.

While optimism over the US lifting some sanctions on Tukey is good news for the Lira, the upside remains capped by external factors in the form of Dollar strength and trade tensions. In regards to the technical picture, the USDTYR has the potential to trade towards 5.45 if a weekly close under 5.60 is achieved.