Economic Data
- (US) Sept Empire Manufacturing: 27.5 v 16.00e
- (CA) Canada Aug Existing Home Sales M/M: +1.8% v +0.8% prior
- (US) Aug Industrial Production M/M: -0.1% v 0.3%e; Capacity Utilization: 78.8% v 79.3%eThe implications of a serious Chinese economic slowdown are reverberating through global markets today, following the lowest Chinese industrial production growth since the depths of the 2008 crisis. European and US equity indices are not down excessively, but there has been a pronounced rotation out of tech and other momentum names and into consumer and utility stocks. As of writing, the DJIA is flat, the S&P500 is down 0.04% and the Nasdaq is down 0.94%.
Crude futures have ticked up off their weekend lows this morning. WTI crude is back above $92 after testing 16-month lows in the $90 handle on Sunday. Brent was at two-year lows: October Brent, due to expire today, fell as low as $96.21, its weakest since July 2012. Gold is not far off eight-month lows, around $1,234.
The pound is holding in a range pivoting around 1.6250 this morning. Two polls out over the weekend showed the no to independence vote with a slight edge, although the undecided portion is still up around 10%. The next round of polls is scheduled for September 17th. EUR/USD is off its worst levels from the European session, trading up to 1.2950 compared to lows of 1.2910 earlier.
Investors are eagerly awaiting more news on the Alibaba IPO. Recent reports suggest the issue will price on September 17th and begin trading on September 18th. This morning, there was talk the pricing could be as high as $70/shr; CNBC later reported that while it could go up to $66, it would not likely rise as high as $70.
Dutch brewer Heineken was approached by SABMiller about a potential takeover, however Heineken's controlling family, which owns just over 50%, said it wanted to keep the company independent. There were separate reports that AB InBev was discussing financing options for a bid for SABMiller, although later reports said the financing was not for a SABMiller buy.
Microsoft has confirmed that it will acquire gaming developer Mojang, the firm behind the wildly popular game Minecraft. The price is $2.5 billion. ZF Friedrichshafen has a deal in hand to acquire TRW Automotive for $105.60/shr, in a deal valued as much as $13.5 billion.
Looking Ahead
- 16:00 (US) Crop Condition Report
- 17:00 (CO) Colombia July Industrial Production Y/Y: +2.2%e v -0.6% prior
- 17:00 (CO) Colombia July Retail Sales Y/Y: 7.1%e v 2.2% prior
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USD/JPY refreshes 34-year high, attacks 155.00 as intervention risks loom
USD/JPY is renewing a multi-decade high, closing in on 155.00. Traders turn cautious on heightened risks of Japan's FX intervention. Broad US Dollar rebound aids the upside in the major. US Durable Goods data are next on tap.
Gold stays in consolidation above $2,300
Gold finds it difficult to stage a rebound midweek following Monday's sharp decline but manages to hold above $2,300. The benchmark 10-year US Treasury bond yield stays in the green above 4.6% after US data, not allowing the pair to turn north.
Worldcoin looks set for comeback despite Nvidia’s 22% crash Premium
Worldcoin price is in a better position than last week's and shows signs of a potential comeback. This development occurs amid the sharp decline in the valuation of the popular GPU manufacturer Nvidia.
Three fundamentals for the week: US GDP, BoJ and the Fed's favorite inflation gauge stand out Premium
While it is hard to predict when geopolitical news erupts, the level of tension is lower – allowing for key data to have its say. This week's US figures are set to shape the Federal Reserve's decision next week – and the Bank of Japan may struggle to halt the Yen's deterioration.