This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Global Macro: China Data Brighten Outlook

Stocks in this article: RSX FXA GCC

NEW YORK ( TheStreet) -- Chinese data provided a catalyst for bullish moves in Russian equities and the Aussie dollar on Monday.

Chinese data are filling the gap for a relatively light week for U.S. economic news. Trade data from China released early Monday morning showed that export numbers exceeded market expectations, a signal that efforts by the Chinese government to stabilize the economy are working.

On Tuesday morning, China will release industrial and retail numbers, which should weigh on trader sentiment at least at the opening bell and in U.S. futures trading.

The Russian economy is heavily dependent on oil production and services. This industry is showing relative strength and was similarly aided by strong Chinese data.

Meanwhile, violence is Syria was responsible for a large run-up in oil prices, which alongside fundamental data has helped push commodities and Russian equities to monthly highs.

On a technical level, the Market Vectors Russia ETF (RSX), pictured below, has formed an inverse head-and-shoulders pattern on the daily chart.

Continued strength in the oil sector and bullish investor sentiment surrounding Russia could lead to a break higher in this exchange-traded fund and a move toward overhead resistance at yearly highs.

The last chart is of CurrencyShares Australian Dollar Trust (FXA) . The Aussie dollar is in a similar situation to Russian equities, as it is heavily influenced by China and commodities.

Australia is a big exporter to China, and its currency has caught a bid higher as strong data improved investor outlook on the Chinese economy.

Also bullish for the Aussie dollar was the Reserve Bank of Australia's decision to hold the cash rate at its current level in recent weeks. With previously weak economic fundamentals, that decision was a positive sign that policymakers believe in the recovery of Australian economic growth.

Similarly, commodity indexes have been forming strong bottoming patterns, fueling the strength of emerging economies and currencies. A double bottom seen in the GreenHaven Continuous Commodity Index (GCC) signals that the resurgence of investor belief in global growth could be on the horizon.

The technical picture of the Aussie dollar shows a strong double-bottom pattern, as well. This pattern alongside the fundamentals mentioned above could lead to a break higher in the currency and a transition into a bullish trend upward.

At the time of publication the author had no position in any of the stocks mentioned.

This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.

Andrew Sachais' focus is on analyzing markets with global macro-based strategies. Sachais is a chief investment strategist and portfolio manager at the start-up fund, Satch Kapital Investments. The fund uses ETF's traded on the U.S. stock market to gain exposure to both domestic and foreign assets. His strategy takes into consideration global equity, commodity, currency and debt markets. Sachais is a graduate of Georgetown University, where he earned a degree in Economics.

Check Out Our Best Services for Investors

Action Alerts PLUS

Jim Cramer and Stephanie Link reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

Jim Cramer's protégé, David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
Try it NOW
Try it NOW
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

Jim Cramer's protégé, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,416.85 +225.48 1.31%
S&P 500 2,021.25 +19.09 0.95%
NASDAQ 4,683.4070 +45.4130 0.98%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs