Strong German data offsets sluggish Chinese imports/exports

Tuesday, September 08, 2015

Market conditions were subdued yesterday due to the US Labor Day holiday. The USD index initially slid lower towards 95.50 this morning but recovered part of earlier losses and hovered around 96.0 against a basket of currencies. The softer USD provided strong support to most commodity prices. Base metal prices rebounded strongly with copper leading the gains after increasing by over 1.25%, above $5,200 this morning. Aluminium held above $1,600, while lead and nickel extended gains over 0.5% towards $1,700 and $9,800, respectively.

Precious metals remained in positive territory with gold hovering around $1,100/ounce and silver gaining over 0.6% towards $14,70.

Copper climbs towards $5,300 

LMCADS03 Comdty (LME COPPER    3 2015-09-08 09-16-10 

Asian equity markets recovered and posted strong gains overnight. The Hang Seng Index rallied over 600 points (+3.0%) towards 21,200 while the Shanghai Composite index gained nearly 3%, towards 3,200. However, Chinese data remained fairly disappointing as exports declined 5.5% y/y in August and imports fell sharply by 13.8% y/y in August, missing analysts’ expectations of a 7.9% drop.  

Germany’s exports remain solid following an increase of 2.4% m/m in July, beating expectations of a 1.0% rise. Imports also increased by 2.2% versus estimates of a 0.7% rise. Market participants will be keeping an eye on the release of the Eurozone’s GDP data as well as US Labor market conditions and consumer credit. This morning, European equity markets posted strong gains as the DAX, CAC, IBEX and London’s equity benchmark index gained between 1.3% and 1.8%. The euro edged higher towards 1.12 against the USD.   

DAX index rallies following solid German data

DAX Index (Deutsche Boerse AG Ge 2015-09-08 09-14-43 

The Japanese economy shrunk by -0.3% in Q2 2015, while GDP Annualised was reported at -1.2% in Q2 2015, versus analysts’ expectations of -1.8%. In the meantime, there is increasing speculation that the Bank of Japan could signal further monetary easing amid concerns over sluggish Japanese growth. The Nikkei Index plunged over 400 points (-2.5%) towards 17,420, following the recent poor economic data.  

 

Events for today:

0001

CN

Aug

Trade Balance

0001

UK

Aug

BRC Retail Sales

0050

JP

Q2

GDP

0700

DE

Jul

Trade Balance

1000

EZ

Q2

GDP

2000

US

Jul

Consumer Credit

All times UK Local Time

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