Yesterday's US ISM figures fell below 50 to 49.1% in August from 51.2% in July, signalling a contraction in manufacturing activity. This is the lowest reading since January 2016 and a clear sign that the U.S. manufacturing sector has been hammered by U.S.-China trade tensions. The index has fallen nearly 10 points since the trade war began last summer. What is worse, there are further signs of why the economy in the US might be in a worse situation than meets the eye, which I cover in my video below.
Meanwhile, China and US negotiations are not making much progress with President Trump hurling new threats on Tuesday that Chinese manufacturing would “crumble” if the country did not agree to the United States’ trade terms. China which has already lodged a tariff case at WTO against the U.S. does not seem to be willing to yield to the U.S.’s demands even though negotiations have at least not completely crumbled yet.
UK MPs to Take Back Control?
Yesterday, British lawmakers defeated Prime Minister Boris Johnson's government in a vote to seize control of the parliamentary business, moving closer to blocking a no-deal Brexit. UK PM Johnson had previously threatened to call for snap elections in such a scenario so we would definitely stay tuned to see what happens. EU bourses opened higher amid optimism that the Brexit debacle could be resolved by finding a viable deal for an orderly U.K. exit.
All Eyes on the BoC
Today, investor interest will turn to the latest BoC Interest Rate Decision for direction on the CAD. There is a clear difference of opinion within central banks meanwhile, with the Fed and the ECB taking a completely different stance on how strongly to react to the current situation, which from my point of view means that both central banks may disappoint market expectations on their next meetings.
Forex Preview: GBP Recovers
The GBP gained more than 0.5% today wildly recovering overnight on news that PM Johnson seems to not be able to push through his no-deal Brexit. The pound will now wait for new input of what will happen politically today in the UK. The USD meanwhile gave some of its strength back after the negative ISM but still remains in place to recover. Elsewhere, the EUR: enjoyed a mild turnaround in sympathy with the GBP and the USD weakness, we would watch for the data out of the EU this morning for further input.
Oil Prices Wallow, Gold Set to Edge Higher
Oil prices recovered some ground on Wednesday after touching their lowest in close in a month during the previous session on negative US data and global economic concerns. Spot gold dipped slightly this morning after rising 1% in the previous session, with prices hovering near a more than six-year high on heightened fears of a global recession. Gold has once more showed how quickly it can trade higher when risk-off comes back, and I do think it has further potential up.
Bitcoin to Reclaim 11K?
BTC pushed even higher today after a long rally yesterday and broker the resistance around 10.5k and needs to remain above that and trade towards the 11k next to build more momentum from here back up.
Watch the video here:
Meanwhile, China and US negotiations are not making much progress with President Trump hurling new threats on Tuesday that Chinese manufacturing would “crumble” if the country did not agree to the United States’ trade terms. China which has already lodged a tariff case at WTO against the U.S. does not seem to be willing to yield to the U.S.’s demands even though negotiations have at least not completely crumbled yet.
UK MPs to Take Back Control?
Yesterday, British lawmakers defeated Prime Minister Boris Johnson's government in a vote to seize control of the parliamentary business, moving closer to blocking a no-deal Brexit. UK PM Johnson had previously threatened to call for snap elections in such a scenario so we would definitely stay tuned to see what happens. EU bourses opened higher amid optimism that the Brexit debacle could be resolved by finding a viable deal for an orderly U.K. exit.
All Eyes on the BoC
Today, investor interest will turn to the latest BoC Interest Rate Decision for direction on the CAD. There is a clear difference of opinion within central banks meanwhile, with the Fed and the ECB taking a completely different stance on how strongly to react to the current situation, which from my point of view means that both central banks may disappoint market expectations on their next meetings.
Forex Preview: GBP Recovers
The GBP gained more than 0.5% today wildly recovering overnight on news that PM Johnson seems to not be able to push through his no-deal Brexit. The pound will now wait for new input of what will happen politically today in the UK. The USD meanwhile gave some of its strength back after the negative ISM but still remains in place to recover. Elsewhere, the EUR: enjoyed a mild turnaround in sympathy with the GBP and the USD weakness, we would watch for the data out of the EU this morning for further input.
Oil Prices Wallow, Gold Set to Edge Higher
Oil prices recovered some ground on Wednesday after touching their lowest in close in a month during the previous session on negative US data and global economic concerns. Spot gold dipped slightly this morning after rising 1% in the previous session, with prices hovering near a more than six-year high on heightened fears of a global recession. Gold has once more showed how quickly it can trade higher when risk-off comes back, and I do think it has further potential up.
Bitcoin to Reclaim 11K?
BTC pushed even higher today after a long rally yesterday and broker the resistance around 10.5k and needs to remain above that and trade towards the 11k next to build more momentum from here back up.
Watch the video here:
