Richard Perry
Independent Analyst
Volatility in Asian markets has been elevated by the significant fluctuations in the Chinese Shanghai stock market. However, the big impact is coming across the commodities complex which remains under significant pressure as questions over the sustainability of
Chinese demand continue to drag prices lower. The prices of oil, copper and gold are all under pressure. This is weighing on any indices with exposure to these markets such as the FTSE 100, which fell yesterday towards it key July 6430 low. However, such is the volatility in these markets, the European indices have opened slightly higher in early trading. As is usually the case with China, traders will look towards the PBOC and the government to step in to prevent any significant contagion and this could be helping to stabilise the market today.
In forex trading there is a mixed outlook today. Although the dollar is stronger against the euro and yen; sterling is broadly flat in front of UK growth and the Aussie and Kiwi are slightly stronger. Traders will be watching for the first reading of UK Q2 GDP at 0930BST. The expectation is that there will be a strong reading of +0.7% quarter on quarter up from the +0.4% final reading of Q1. There is also the Case Shiller House Price at 1400BST which is expected to continue the positive housing data recently and show an improvement from 4.9% to 5.6%. The US Consumer Confidence will certainly be well watched at 1500BST but is expected to dip slightly to 100.0 from 101.4.
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