China GDP beats expectations, boosts stocks

•       China GDP beats expectations, boosts stocks

–      GDP +7.4% in 2014, just a bit below target of +7.5%. Not bad at all, given the continuing reform measures on shadow banking, local finance, property market

–      But growth is clearly slowing, so China is likely to be a source of deflation for the global economy going forward regardless = currency wars still to come

•       Denmark cuts interest rates 15 bps to defend the DKK peg

–      Deposit rate deeper negative @ -0.2%, lending rate barely positive  @ +0.05%

–      Economy Minister says peg is “stable”

–      DKK peg has lasted since 1982 so I doubt if it will break now – but I didn’t think Swiss would abandon the floor, either

•       Dollar gains against most currencies, both G10 and EM

–      Slightly lower vs EUR; gains most vs CHF. I expect further gains in USD/CHF

•       Today:

–      Eurozone: German PPI likely to slip further into deflation, adding to pressure on ECB = EUR-negative. But ZEW survey for January forecast to rise for 3^rd consecutive time = EUR-positive. Net net, trade EUR technically today

–      Canada:  Manufacturing sales for November

–      US: NAHB housing market index for January expected to show small improvement