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TD Securities reports that China's economy began 2026 with a positive momentum, driven by a rebound in fixed-asset investment fueled by quasi-fiscal policies. The firm suggests that these measures are helping to counterbalance the economic strain caused by global oil price volatility. Key factors include government-led infrastructure projects and targeted fiscal stimulus, which are boosting domestic demand and stabilizing growth. This development is significant for global markets, particularly commodity and forex traders, as China's economic health directly impacts global demand for oil and other resources. A stable Chinese economy could mitigate downward pressure on oil prices, offering relief to energy producers. Additionally, the effectiveness of quasi-fiscal policies may influence investor sentiment toward emerging market assets. For MENA investors, the interplay between China's fiscal strategies and oil markets underscores the need to monitor energy price trends and their ripple effects on Gulf economies. Traders should watch for updates on China's infrastructure spending and how it interacts with OPEC+ supply decisions. The broader implication is that China's policy response could serve as a model for other emerging markets facing similar commodity-driven challenges.
