The Chinese economy and reporting data can be highly influential when implementing or considering binary trading opportunities. The sheer size of the Chinese economy means that even the smallest fluctuation within its financial infrastructure may trigger a market reaction, therefore exposing an opportunity to get involved in binary trading. Binary trading addresses a yes or no proposition. Chinese economic data may be used to offer key indications into potential market movements.
Chinese economic growth is very fast but the country’s growth rate only seems exceptional when compared to other countries. By tapping into the internal machinations of the Chinese economy the trader can expose elements which may stifle growth and trigger market reaction. By moving against the reputational ideology that China is associated with unanimous growth, growth itself can be quantified in a more engaging way.
China’s answer to the world’s financial crisis seems to have come in the form of credit and a series of recent data certainly reaffirms these record levels of expansion. A broad measure of the Chinese money supply known as M2 has increased by a whopping 55% in the last two years and Yuan loans have also surged to 60%.
The value attributed to this growth needs to be balanced with inflation concerns. Not surprisingly, as a result of this growth China has experienced an increased level of inflation, forcing China to yet again raise interest rates, having already increased interest rates in October 2010. The Chinese bubble has also been deflated by a trade balance which didn’t quite realize market expectations. Forecasts predicted a trade balance of $20.75 billion; the prediction was to an extent based on the previous trade balance of $20.89 billion. However the December balance actually revealed a lower than expected trade balance in the imports and exports industry of $13.10 billion.
While this is still a good figure the rate of Chinese growth has raised the trading bar, leading to a high level of market expectation, a tricky challenge to consistently fulfill. Binaries can be used either to endorse or move against market anticipation.
IG Markets offers a wide range of options trading possibilities including binary options traded on the Nadex exchange, a CFTC regulated derivatives exchange. Binary options have a significant risk of loss as well as profit. The material above does not contain (and should not be construed as containing) investment advice or an investment recommendation.
