China concerns gather pace

21 August, 2015

Not a comfortable end to the week for many markets as ongoing concerns regarding China and emerging markets in general weigh on sentiment. This was pretty evident in stock markets yesterday, down 2% or more in Europe and the pattern has been repeated overnight, with markets in both Japan and China down by nearly 3%. The latest manufacturing PMI data for China, released overnight, added to the bearish tone, disappointing expectations for a modest recovery from last month’s 47.8 reading (above 50 generally indicating expansion). In currencies, the dollar was mostly weaker, with the single currency, Swiss franc and Japanese yen gaining the most. The Australian dollar was again unable to shake-off its associations with China, down below the 0.73 level on AUDUSD a couple of times over the past 24 hours. The fact that we are seeing another election in Greece next month is not a surprise, but was largely over-looked by markets against the turmoil being seen elsewhere.

This background makes it that bit less comfortable for the Fed when considering whether to raise interest rates next month, with the balance of probabilities now less than 50:50 as we discussed yesterday. The early focus in Europe this morning is with the advance release of PMI data, where early indications suggest weaker than expected numbers if the release from France is to be repeated. Other than that, we see CPI and retail sales data in Canada, where the Canadian dollar has also been under pressure and retaining the move above the 1.30 level on USDCAD. FX likely to be dominated by flight to safety and a dollar under pressure as Fed tightening expectations are further eroded.


Source link  
The precious metal has broken out

The precious metal has broken out from its descending wedge around 1331.00 and moved higher to create a lower high at 1361.80.The price then...

All Focus on US inflation data

The USD has weakened further overnight as the market awaits important US Data at 13:30 GMT. USDJPY broke down under 107.000, while...

Central Bank speakers start a quiet week

UK MPC Member Vlieghe spoke at the Resolution Foundation in London. Some of the comments made were: If there is less credit headwind to the UK economy...


Equities Face a Nervous Session

The global equity markets are bracing themselves for a stormy closing session this week, as data from Thomson Reuters Lipper unit shows US fund...

Super Thursday for the Bank of England

The Bank of England is expected to largely proceed as normal today on ‘Super Thursday’ when the central bank releases its policy decision and statement...

US Nonfarm Payrolls Today

Today is Non-farm Payrolls day in the US. This data release is generally one of the most important of the month, being a leading indicator of consumer...


Australian Dollar drops after soft data

The Australian dollar eased on Thursday following weaker-than-expected economic data. The Australian Dollar took an initial knock on Wednesday on...

Trump Supports a Strong Dollar

Markets have had a volatile session this week thanks to various US officials and yesterday was no exception, with President Trump speaking in Davos...

A Weaker Dollar is Good for the US

Yesterday, Senior US Officials took the lead from their President and made clear the US position on Trade. Commerce Secretary Wilbur Ross...

  


Share: