Forex Flash: Good news continues with Chinese service sector recovery – Societe Generale

Kit Juckes, Global Head of Currency Strategy at Societe Generale notes that China’s service-sector is recovering and the trend of good news continues.

He writes, “Friday’s US payroll data put employment growth at 1.5% y/y, enough to sustain moderate economic growth. There are still no signs of inflationary pressure and there is absolutely no reason to believe the fed is going to change tack any time soon.”

He feels that the factors which have driven asset inflation at a frantic pace still dominate and the market is split between those who believe the disconnect between assets and underlying economic activity is unsustainable, and those who think the weight of QE inspired buying is too big to fight. He places himself very firmly in the latter camp.