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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Editors’ Picks
EUR/USD holds above 1.0750 to start the week
EUR/USD trades in positive territory above 1.0750 in the European session on Monday. The US Dollar struggles to find demand following Friday's disappointing labor market data and helps the pair hold its ground.
GBP/USD edges higher toward 1.2600
Following Friday's volatile action, GBP/USD pushes higher toward 1.2600 on Monday. Soft April jobs report from the US and the modest improvement seen in risk mood make it difficult for the US Dollar to gather strength.
Gold rebounds above $2,310 after downbeat NFP data, eyes on Fedspeak
Gold price trades in positive territory above $2,310 after closing the previous week in the red. The weaker-than-expected US employment data have boosted the odds of a September Fed rate cut, hurting the USD and helping XAU/USD find support.
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Bitcoin price trades around $63,000 with no directional bias. The consolidation has pushed crypto investors into a state of uncertainty. Investors can expect a bullish directional bias above $70,000 and a bearish one below $50,000.
Week ahead: BoE and RBA decisions headline a calm week
Bank of England meets on Thursday, unlikely to signal rate cuts. Reserve Bank of Australia could maintain a higher-for-longer stance. Elsewhere, Bank of Japan releases summary of opinions.