Global markets remain under pressure following Chinese mixed data

Tuesday, September 01, 2015

Asian equity markets remain under pressure as the Hang Seng Index and the Shanghai Composite index retreated 1.7% and 1.25%, respectively, overnight. Chinese economic data was fairly mixed as Manufacturing PMI dropped to 49.7 y/y in August from 50.0 in July, in line with expectations. However, the non-Manufacturing PMI figure was reported at 53.4 y/y in August. The Caixin manufacturing PMI increased to 47.3 y/y in August from 47.1 in July beating expectations of 47.1.   

In Japan, the Nikkei index plunged over 700 points (-3.85%) towards 18,160 following the recent disappointing economic data. Japan’s industrial production dropped 0.6% m/m in July versus analysts’ expectations of a 0.1% rise, while housing starts rose 7.4% m/m in  July missing estimates of an 11.0% increase.

The Nikkei Index extended sharp declines towards 18,160

NKY Index (Nikkei 225)  Daily 30 2015-09-01 08-56-17

European equity markets extended sharp losses this morning as the DAX retreated over 1.8% in early trade despite the solid German macroeconomic figures. German retail sales increased 1.4% m/m in July beating analysts’ expectations of a 1.1% rise. The CAC, IBEX, Italian and London equity benchmark indices declined between 1.2% and 1.8%, ahead of the key release of Markit manufacturing PMI data which will set the tone for today’s trading session. The euro has edged higher in early trade, hovering around 1.13 against the USD.

The strong upside rally halted in the oil market. WTI front month futures have climbed over $10 during the last three trading sessions towards $50 per barrel, erasing recent sharp losses to finish at $49.20/barrel in August. This morning, WTI futures retreated over 3% in early trade verifying our concerns for high volatility and nervous trading conditions in the oil market until the situation stabilises. Brent front month futures dropped nearly 3% in early trade this morning towards $52 per barrel. Market participants will be keeping an eye on the release of the weekly API oil inventories report after the close of today’s session for further direction.

WTI crude oil remains under renewed pressure 

CLV5 Comdty (WTI CRUDE FUTURE  O 2015-09-01 08-59-05

  

Events for today:

0245

CN

Aug

Manufacturing PMI

0245

CN

Aug

Non-Manufacturing PMI

0245

CN

Aug

Caixin Manufacturing PMI

0855

DE

Aug

Markit Manufacturing PMI

0900

EZ

Aug

Markit Manufacturing PMI

0930

UK

Jul

Consumer Credit

0930

UK

Aug

Markit Manufacturing PMI

1000

EZ

Jul

Unemployment Rate

1445

US

Aug

Markit Manufacturing PMI

1500

US

Aug

ISM Manufacturing

1500

US

Jul

Construction Spending

1500

US

Sep

IBD Sentiment

 

All times UK Local Time

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