Following news that China's export growth is accelerating, there was much talk that the country could raise interest rates to help dampen down booming demand.
The central bank has indeed acted, hiking the reserve requirement for its banks as a tightening move, but analysts wonder if this is the last of it. Kathleen Brooks at Forex.com said:
Stronger than expected Chinese trade data failed to spark a rally in risky assets. Exports rose at a whopping 34.9 per cent annualised rate in November, imports rose by 37.7 per cent. The People's Bank of China reacted to the rise by hiking the Reserve Requirement Ratio for banks by 50 basis points that will be implemented on 20 December.
Further data is released this weekend including inflation data, which is expected to rise at a 4.7% annualised rate last month, up from 4.4% in October. The markets have been expecting an interest rate hike, so we will have to wait and see if today's announcement will be all the PBOC announces this weekend.
At the moment the market seems unconcerned, with the FTSE 100 fairly steady, up 1.02 points at 5808.98, as European bond yields ease back.
