China equities halted for the second time in a week. Markets remain in risk aversion mode
- Australia building approvals m/m -12.7% vs. -3.0%
- Germany factory orders m/m 1.50% vs. 0.10%; y/y 2.10% vs. 1.10%
- Germany retail sales m/m 0.20% vs. 0.50%; y/y 2.30% vs. 3.70%
- Swiss unemployment rate 3.7% vs. 3.8% previously
- UK Halifax house prices 3m/y 9.50% vs. 9.0%; m/m 1.70% vs. 0.50%
- Eurozone retail sales m/m -0.30% vs. 0.20%; y/y 1.40% vs. 2.0%
- Eurozone unemployment rate 10.50% vs. 10.70%
- BoC Governor Poloz speech
- US initial jobless claims 277k vs. 276k
Coming up
- Fed’s Lacker Speech
- Canada Ivey PMI
- Fed’s Evans Speech
China continues to rattle global equity markets as trading was halted for the second time this week as the Chinese Shanghai Composite Index closed the day with -7.32% losses, leading to the circuit breakers in the stock exchange ceasing all trading. Asian equity markets were weak with the Nikkei225 Index closing with -2.33% losses. The commodity risk currencies continued to remain weak, with AUDUSD posting another day of declines, losing -1.16% for the day. AUDUSD was trading at 0.7, near a 13 week low. Economic data from Australia today saw the monthly building approvals fall -12.70%, more than the -3.0% expected decline. NZDUSD was also down -0.58% as the currency is currently trading near intraday lows of 0.66.
[Tweet “Chinese Shanghai Composite Index closed the day with -7.32% losses”]
The Japanese Yen, which is currently up 2.21% on a week to date basis continued to stay firm as investors flocked to the safe-haven currency. USDJPY was down -071% for the day, trading at 117.63 after touching down to post an intraday low at 117.33.
The European trading session got underway with a stronger Euro. EURUSD continued to trade strongly as the single currency was back above the 1.08 handle, trading above the previously established support/resistance level. For the day, EURUSD gained 0.81%, currently at 1.0867. Data from Eurozone saw the Germany factory orders post a strong number, rising 1.50% for the month, while gaining 2.10% for the year. Retail sales from the country were however subdued, rising 0.20%, below estimates of 0.50% for the month. Eurozone retail sales were weaker, as a result, losing -0.30% against expectations of 0.20%. However, the single currency shrugged off the bad news as the region’s unemployment rate fell to 10.50% marking the lowest unemployment rate since October 2011. European equities were weak following their global counterparts. The German DAX is down -3.44% while the London FTSE100 was down -2.88%.
The British Pound continued to trade weak to the US Dollar as GBPUSD touched the lows of 1.4533 before posting a strong reversal on the hourly charts. The cable is down -0.39% for the day.
The NY trading session kicked off with a speech from BoC Governor Poloz who noted that due to the decline in commodity prices and lower Oil, inflation was looking weaker. Keeping in line with his views previously aired about the Central bank not hesitating to use negative interest rates, he said that the BoC inflation expectations were well anchored and that the central bank would look to the current slump but that the BoC could use both conventional and unconventional monetary policy measures in order to mitigate any risks to inflationary forces. USDCAD is up 0.40%, with prices being repeatedly rejected near the highs of 1.416. US weekly unemployment claims saw a modest increase, rising to 277k against expectations of 276k. The US Dollar was muted to the news. US equity markets are looking to a weaker open today with the S&P500 down -2.29% or 45 points while the Dow Jones Index futures are down -2.26%, about 380 points lower.
[Tweet “Gold continued to keep its gains reaching 0.76% for the day after touching a new high of 1104 “]
On the commodity front, Gold continued to keep its gains gaining 0.76% for the day after the precious metal touched a new high of 1104 before pulling back lower. The move to $1100 shouldn’t come as a surprise to our readers where we noted in the weekly analysis for precious metals that Gold was likely to test $1100 in the short term. Crude Oil prices continue to fall, losing -3.9% for the day after briefly touching lows of $32.10 a barrel.
The remainder of the evening is marked by Fed member speeches and Canadian Ivey PMI data.
