Global markets remain highly volatile

Wednesday, September 02, 2015

The negative Chinese economic data weighed on market sentiment across the global equity markets yesterday, prompting further sell-off in global equities and commodities. Overnight, Asian equity markets remained in negative territory but limited recent heavy losses. The Hang Seng index dropped over 1% towards 20,900 and the Shanghai Composite index retreated marginally by 0.2% towards 3160. In Japan, the Nikkei index fell nearly 0.4% following the general downtrend.

European equity markets opened higher this morning, as investors seemed to have benefitted from the recent low levels in the markets. The DAX climbed over 0.8% in early trade and led the gains in other European markets. The CAC, IBEX, Italian and London equity benchmark indices gained between 0.50% and 1.2% this morning. Market participants will be keeping an eye on the release of the UK Markit/CIPS Construction PMI as well as Eurozone’s PPI data for further direction. The euro came under renewed pressure and slid lower towards 1.1250 against the USD.

Crude oil prices extended declines this morning as disappointing Chinese economic data, poor oil fundamentals and the stronger USD weigh heavily on market sentiment. WTI front month futures declined sharply over 8% yesterday as Chinese growth concerns hurt sentiment. WTI front month futures are currently trading around $44 per barrel, while Brent front month futures breached again below the key level of $50 per barrel, hovering around $49. This afternoon, the release of the weekly EIA oil inventories report could provide further direction. According to a Bloomberg survey, a small increase of 444K of crude oil stocks is expected for the week ending 28th August. Gasoline inventories are estimated to have dropped by 1.6 mln barrels while distillate stocks are expected to have increased by 944K.   

Market participants will be keeping an eye on the release of the US Fed Beige Book details this evening. Gold has been hovering around $1140/ounce and silver currently consolidated around $14.50. Base metal prices rebounded from yesterday’s losses and edged higher this morning with copper holding above the psychological level of $5,000. The USD index has climbed towards 96.0 against a basket of currencies.

EURUSD

EURUSD Curncy (EUR-USD X-RATE)   2015-09-02 09-10-51

WTI front month futures

CLV5 Comdty (WTI CRUDE FUTURE  O 2015-09-02 09-09-44

 

Events for today:

0930

UK

Aug

Markit/CIPS Construction PMI

1000

EZ

Jul

PPI

1315

US

Aug

ADP Employment

1330

US

Q2

NF Prod. & Labour Costs

1500

US

Jul

Factory Orders

1530

US

w/e

EIA Energy Stocks

1900

US

Sep

Fed Beige Book

 

 

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