Weakness in Chinese trade data has commodities on edge - TD Securities

Eren Sengezer FXStreet

"Weakness in the Chinese trade data has commodities on edge, as concerns of a major slowdown in the world's largest commodity consumer continue to grow," note TD Securities analysts.

Key quotes

"While the extent of the weakness in the numbers could be highlighting front-running ahead of tariffs, the fact remains that both unwrought copper and concentrate imports were materially lower. This reduction in physical demand continues to weigh on the red metal, as prices trend materially below recent highs. But, we anticipate Chinese authorities will announce new stimulus measures, which suggests we may have already seen the lows a few weeks ago."

"The environmental aluminum smelter shutdowns were put on hold, but exports were still marginally lower in December as US tariffs directed at Chinese producers took hold. Nonetheless, export levels are still extremely elevated, which is highlighted by building LME and SHFE inventories."

"Chinese crude imports reached another all-time high in December, while natural gas imports also made new highs, to the detriment of coal imports. With prices nearly 30% off their highs, Chinese refineries will likely keep run rates near their highs, which should keep the Middle Kingdom's crude appetite robust into 2019. As such, recent concerns that demand is ebbing are likely overblown."

Author

Eren Sengezer

FXStreet

As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.

EUR/USD stays defensive below 1.1900 as USD recovers

EUR/USD trades in negative territory for the third consecutive day, below 1.1900 in the European session on Thursday. A modest rebound in the US Dollar is weighing on the pair, despite an upbeat market mood. Traders keep an eye on the US weekly Initial Jobless Claims data for further trading impetus.

GBP/USD holds above 1.3600 after UK data dump

\GBP/USD moves little while holding above 1.3600 in the European session on Thursday, following the release of the UK Q4 preliminary GDP, which showed a 0.1% growth against a 0.2% increase expected. The UK industrial sector activity deteriorated in Decembert, keeping the downward pressure intact on the Pound Sterling.

Gold sticks to modest intraday losses as reduced March Fed rate cut bets underpin USD

Gold languishes near the lower end of its daily range heading into the European session on Thursday. The precious metal, however, lacks follow-through selling amid mixed cues and currently trades above the $5,050 level, well within striking distance of a nearly two-week low touched the previous day.

Cardano eyes short-term rebound as derivatives sentiment improves

Cardano (ADA) is trading at $0.257 at the time of writing on Thursday, after slipping more than 4% so far this week. Derivatives sentiment improves as ADA’s funding rates turn positive alongside rising long bets among traders.

The market trades the path not the past

The payroll number did not just beat. It reset the tone. 130,000 vs. 65,000 expected, with a 35,000 whisper. 79 of 80 economists leaning the wrong way. Unemployment and underemployment are edging lower. For all the statistical fog around birth-death adjustments and seasonal quirks, the core message was unmistakable. The labour market is not cracking.

Sonic Labs’ vertical integration fuels recovery in S token

Sonic, previously Fantom (FTM), is extending its recovery trade at $0.048 at the time of writing, after rebounding by over 12% the previous day. The recovery thesis’ strengths lie in the optimism surrounding Sonic Labs’ Wednesday announcement to shift to a vertically integrated model, aimed at boosting S token utility.