China: Limited prospects of sustained bounce in Industrial Production – TD Securities

Sandeep Kanihama FXStreet Contributor

TD Securities analysts point out that China’s industrial production has slowed sharply, hitting a multi-year low of 4.8% y/y in July as the manufacturing sector becomes increasingly impacted by tariffs.

Key Quotes

“China’s manufacturing PMI has been in contraction for 4 straight months, while other indicators such as electricity production are weak, suggesting limited prospects of sustained bounce in IP. Nonetheless, IP weakness appears to have overshot the decline in PMI and a small retracement is expected in August to around 5.2% y/y.”

“Similarly after a relatively sharp slowing to 7.6% y/y retail sales are expected to pick up to 8.0% y/y While this marks an improvement, it is still close to the lowest since the beginning of 2007.”

Author

Sandeep Kanihama

FXStreet Contributor

Sandeep Kanihama is an FX Editor and Analyst with FXstreet having principally focus area on Asia and European markets with commodity, currency and equities coverage. He is stationed in the Indian capital city of Delhi.

EUR/USD appears supported by the 200-day SMA, for now

Following an early pullback to multi-week lows near 1.1670, EUR/USD now manages to reclaim the 1.1700 region as the NA session draws to a close on Monday. The steep retracement in spot follows the equally strong move higher in the US Dollar, as investors continue to assess the geopolitical landscape in the wake of the US and Israel attacks on Iran.

GBP/USD hits new yearly lows near 1.3300

GBP/USD adds to the recent bearish tone, approaching to the key 1.3300 support to reach fresh YTD troughs against the backdrop of the robust performance of the US Dollar. Indeed, Cable’s decline comes amid the firm demand for the safe-haven space in the wake of the US and Israel attacks to Iran.

Gold eases some ground, approaches $5,300

Gold now surrenders part of the earlier advance, reshifting its attenton to the $5,300 zone per troy ounce at the beginning of the week. Indeed, the yellow metal’s firm performance appears propped up by incresing geopolitical jitters in the Middle East, which at the same time fuels the demand for the safe-haven space.