European stocks ended lower on Monday on concerns slowing China’s economy will weigh on global growth. Euro strengthened against the dollar, gaining 2.2% in August. The Stoxx Europe 600 fell 0.5%. The pan-European benchmark index ended the month 8.5% lower, recording the largest decline since August 2011 when the index fell nearly 10.5%. German DAX 30 fell 0.4%, tumbling 9.3% in August, suffering the biggest monthly loss since a near 20% plunge in August 2011. Today at 10:00 CET July unemployment rate will be released in euro-zone. The tentative outlook is neutral.
Nikkei ended 3.8% lower today while yen strengthened as investor confidence was undermined by official report China's manufacturing sector contracted at its fastest pace in three years in August, pointing to the possibility of further slowdown in the world’s second-largest economy. Market sentiment was hurt also by report Japanese companies slowed capital expenditures in the second quarter.
Today Reserve Bank of Australia kept the interest rate unchanged at 2%. Tomorrow at 2:30 CET Q2 GDP data will be released in Australia. The tentative outlook is negative.
Oil futures prices are falling today on profit taking and concerns over possible slowing of Chinese demand after report showed China’s official manufacturing PMI fell to 49.7 in August from 50.0 in July. Oil prices closed almost 9% higher on Monday after the Energy Information Administration report estimated June US crude oil output declined 1.1% from a revised May figure, totaling 9.3 million barrels- a-day.
Gold is rising today after Asian equities retreated on concerns China’s economy is slowing sharply. Gold prices closed lower yesterday as the likelihood of Federal Reserve interest rate hike in September limited the attractiveness of the safe haven metal. Gold advanced about 3.4% in August, recording the largest gains since January’s 8% surge.
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