European markets are heading for a lower open today (Thursday) with investors looking ahead to the Q2 GDP and employment change over the same period. Data continues to come in very weak from Germany where Industrial Production just showed a further decline after Factory Orders plummeted again yesterday (-11.7% m/m). This also plays a role in last night’s weak Chinese imports data, which declined again -7.3% y/y, although this was less than expected. Exports also contracted and to stay within the same region, the Australian Trade Balance deteriorated by about 2 billion in July. Yesterday the BOC left rates unchanged at 5% while the FED’s Beige Book saw an unusual abuse of the word ”recession” (used 15 times), despite it having clearly disappeared from the last corporate earnings reports.
Equity markets are weak while Rates and USD keep going higher. The Chinese have given up defending their onshore FX exchange rate (CNY) and it has broken above recent highs. Oil is unstoppable on the back of recent news and apparent supply shortage. EU GDP is expected to have been positive in Q2 (+0.3%) and also on a yearly basis (+0.6%). US Jobless claims will give us new insight into the labour market which seems to have slowed down as per last week’s data.
- FX – USDIndex +0.05% at 104.87, USDJPY touched 147.87, now -0.14% at 147.47, USDCNH 7.329, Cable – 0.07% and < 1.25, AUDUSD +0.11% @ 0.6387.
- Stocks – EU Futures -0.3% (both GER40 and FRA40), US30 -0.20%, US100 -0.34%, AAPL, NVDA >-3% yesterday.
- Commodities – USOil giving up some of the recent gains but still close to recent highs, -0.43% @ $87.18, UKOil trades @ $90.26.
- Gold – $1917,83, mainly flat. XAG leads the way, -0.47% at $23.06.
LATER TODAY: EU Q2 employment change, EU Q2 GDP, US Jobless claims, FED’s Williams, Bostic, Bowman, BOC’s Governor speech.
INTERESTING MOVER: GBPUSD (-0.26% this morning @ 1.2475) remains heavier than other peers, has broken recent lows and is heading toward 1.2440 support, 200MA at 1.2430, weak RSI, Negative MACD.
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Marco Turatti
Market Analyst
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