The big financial news over the weekend was the drop in house prices and drop in new housing starts reported in China. One of the biggest developers, Evergrande, is on the brink of defaulting on $300 billion of debt and shares in another major developer, Fantasia, dropped 50% as it warned of potential defaults. So what does that mean globally? The answer is very little as most of that debt is with Chinese banks so any credit crisis would be internal to China. However, in reality it may be an indication of a global cooling in property that may be overdue base on exponential growth felt in some parts of the UK. This news story has little effect on rates but might indicate future volatility.
Here in the UK there was also a 0.6% month on month decrease in house prices reported in the Rightmove House Price Index earlier this morning. Again there was little effect on GBP rates which remains stable against both the Euro and the Dollar. GBP/EUR Has started moving to the upside again overall which may see the rate retest the range high.
Looking ahead it's mainly Euro centric news that's dominating proceedings with ECB President, Christine Lagarde, making a speech and the Euro Trade Balance figures out.
As ever we look forward to keeping you in the loop and look out for our next update.
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Today’s Economic Calendar
EUR: 10:00 ECB Lagarde speech
EUR: 10:00 Trade Balance
UK: Tuesday 07:00 Employment Claimant Count