china and europe....

  1. 10,381 Posts.
    As ECU is China's largest trading partner there is little wonder that China views the troubles over the euro with more that just casual interest.

    In an attempt to aid European stability China has been buying BIGIPS bonds in an effort to aid regional economic stability.

    A sovereign debt crisis in Europe could trigger a global loss of market confidence, another GFC so to speak, and this lies at the heart of China's concerns. Worldwide risk taking by investors could dry up overnight cutting off market liquidity and initiate a collapse of world trade and global industrial production.

    Not only would this gravely effect Australia's trading position but could aggravate our domestic economy through tighter liquidity and the higher cost of money.

    Q1 could hold surprises and no matter what comes from the EZ the markets are nervous and the situation turn on a pin in a day.

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