China: Fiscal support seen offsetting Oil shock – TD Securities

💡 DMK Insight

China’s early 2026 economic rebound could shift global market dynamics significantly. A surge in fixed-asset investment, spurred by quasi-fiscal policy, signals that China is ramping up infrastructure spending. This is crucial for traders, as it may lead to increased demand for commodities like copper and steel, which are often tied to construction and manufacturing. If this trend continues, we could see upward pressure on these asset prices, impacting related markets such as forex pairs involving the Chinese yuan. However, it’s worth noting that while this rebound is promising, it could also lead to inflationary pressures if demand outpaces supply. Traders should keep an eye on key economic indicators from China, particularly any shifts in manufacturing data or export figures, as these will provide insight into whether this investment trend is sustainable. Watch for potential resistance levels in commodity prices around recent highs, as a breakout could signal a stronger bullish trend.