Forex Trading Library

China Industrial Production stalls

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China’s official press-release yesterday over the latest economic data showed a slow in the industrial production’s decay, the year-to-year figure switching in July to an only 6.00% drop, missing the estimated 6.6% drop – June’s figure remains the same at 6.8%. There was also a drop in retail sales growth real data missing the forecasted 10.6% with 0.1%, turning up 10.5% for July. The yearly FAI (Fixed Asset Investment) was estimated at 11.5%, missing the value with a 0.3% margin and reaching only 11.2%. The report released also showed a major decline in China’s relationship with the US and EU. The degradation of export growth is a direct consequence of the slowdown in the industrial sector in July. On the other hand, the drop in sales is the result of a canny domestic demand, undermining PBoC’s (People’s Bank of China) strategies to devaluate the Yuan to favor and also defend exports.

Yesterday’s GBP spike has recovered, the British pound losing ground in favor of the US dollar. The trend switched back to the usual 1.56 area, with which the day started. There was a peak at 1.5604 quickly regained because of the Iacklustre’s report on UK employment. The report revealed that the wage growth missed estimations in June (the growth wasn’t as strong as expected), with a jobless rate remaining at the same level. The weekly earnings (excluding bonuses) for June remained constant from May’s yearly 2.8%, but when the bonuses were included in the equation the rate seemed to drop at 2.4%, well below the previous 3.2%. Regarding the unemployment, the stagnation point seems to be 5.6%. Cable was rejected from 1.5650 level for three times in a raw since the mid of July because the pair just did not have the strength either to hold or to push further from that point. Next resistance will be the psychological round number 1.5700 which will be reach only if we have a strong breakout from current price based on the possibility of a negative outcome in US economy.

Wednesday range for Crude Oil was from $42.8 up to $43.88 per barrel. Despite of the daily top, the barrel of West Texas Intermediate seems to return to lower ground and more precisely to the $43 level. U.S. Energy Information Administration (EIA) mention that the crude inventories are down by almost 1.7 million barrels in the last week (August 3-9) in contrast to a drop of 1.8 million barrels which were expected. Moreover, International Energy Agency has improved their annually forecasts for crude oil demand in spite of the pessimistic thoughts of some experts which believe that the market will balance only in Q4 2016.

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