Markets flat after Chinese data

It's looking a little flat ahead of the European open on Monday, with data from China overnight offering another reminder of the damaging effects of trade wars.

China's economy grew by only 6.2% in the second quarter, its slowest rate of growth in 27 years. There's no doubt in anyone's minds that the trade war is a major contributing factor here, especially coming at a time when the economy was already in the midst of a slowdown as it transitions away from the heavy investment, export led model to a more sustainable domestically driven one.

While industrial production, fixed asset investment and, maybe more importantly, retail sales all exceeded expectations, all the focus has been on that lower growth number. Unemployment also rose slightly but this has been volatile in the past so won't be causing too much concern.

Chinese stocks staged something of a recovery as the session wore on but the trend is not their friend at the moment. Stocks throughout the rest of the region only posted small gains which hasn't offered much direction for Europe and the US, where futures are looking a little flat currently.

Oil lower after Chinese data

Oil prices are a little in the red following the release of the Chinese data overnight. We have seen a recovery over the last few hours but the initial reaction to the data wasn't great. Of course, that won't have been helped by other factors - of which there are currently many - driving the oil market.

A report by the IEA alluding to rising stocks won't be helping either, with the group reporting that supply exceeded demand by 0.9 million barrels per day in the first half of the year. It seems that the OPEC+ cut extension may not have only been essential but it may ultimately not be enough the balance the market. Tropical Storm Barry cut 73%, or 1.38 million barrels, of US production in the Gulf of Mexico, but this is failing to lift prices as WTI struggles to hold on to $60.

Another day, another 10% move

Bitcoin remains as volatile as ever, falling more than 10% on Sunday to hover above $10,000. A cryptocurrency exchange reported a theft of $32m over the weekend, while a Chinese mining firm was raided after stealing $3m in electricity. As is often the case, it’s not clear whether these stories contributed to the sell-off or if they even get the same attention they once would.     

What is clear is that price action is not settling down and no matter which way we turn from here, that could well continue. The $9,500-10,000 area has been tested overnight but is finding a way to hold on for now. A break of this could put some pressure on prices, with $9,000 being the next key level below, while a failure to do so could reinvigorate the hodlers and those that think it's not a case of if it will $20,000 but how soon.