European Open: China’s Data Miss Weighs on Sentiment

Several key data points from China missed expectations, causing equity markets, commodities and commodity FX pairs to weaken overnight.

Downtrend 3

Asian Indices:

  • Australia's ASX 200 index fell by -32.8 points (-0.43%) and currently trades at 7,596.10
  • Japan's Nikkei 225 index has fallen by -504.08 points (-1.8%) and currently trades at 27,472.56
  • Hong Kong's Hang Seng index has fallen by -211 points (-0.8%) and currently trades at 26,180.62

UK and Europe:

  • UK's FTSE 100 futures are currently down -45.5 points (-0.63%), the cash market is currently estimated to open at 7,173.21
  • Euro STOXX 50 futures are currently down -19.5 points (-0.46%), the cash market is currently estimated to open at 4,210.20
  • Germany's DAX futures are currently down -66 points (-0.41%), the cash market is currently estimated to open at 15,911.44

US Futures:

  • DJI futures are currently up 15.48 points (0.04%)
  • S&P 500 futures are currently down -19.25 points (-0.13%)
  • Nasdaq 100 futures are currently down -11.25 points (-0.25%)


Learn how to trade indices


Indices mostly lower, led by Japan

Share markets were mostly lower overnight, with China being the exception with the CSI300 rising 0.23%. Japanese equity markets were broadly lower as the Delta variant continued to weigh on Japan’s economic outlook. The TOPIX fell 1.7% and the Nikkei 225 fell -2.04%. The Nikkei 225 futures contract fell to a 2-week low and probed the top of our bearish target range at 27,370.

Soft earnings, a rise in coronavirus cases and Victoria’s lockdown extension weighed on the ASX 200 which is down -0.4% at the time of writing.

The FTSE 100 touched its highest level since February 2020 on Friday, although closed the week just beneath Thursday’s high. Yet bullish momentum remains in favour of the bull-camp overall so we’re looking for a break above last week’s high whilst prices hold above 7171.60.


FTSE 350: Market Internals


FTSE 350: 4160.37 (0.35%) 13 August 2021

  • 197 (56.13%) stocks advanced and 134 (38.18%) declined
  • 51 stocks rose to a new 52-week high, 3 fell to new lows
  • 78.63% of stocks closed above their 200-day average
  • 78.63% of stocks closed above their 50-day average
  • 25.93% of stocks closed above their 20-day average

Outperformers:

  • + 6.39%   -  Babcock International Group PLC  (BAB.L) 
  • + 5.26%   -  Indivior PLC  (INDV.L) 
  • + 3.71%   -  Sirius Real Estate Ltd  (SRET.L) 

Underperformers:

  • -27.7%   -  Avon Protection PLC  (AVON.L) 
  • -4.94%   -  Tyman PLC  (TYMN.L) 
  • -4.33%   -  Just Group PLC  (JUSTJ.L) 


AUD broadly lower:

Commodity currencies were lower overnight on the back of weak data form China. However, the Australian dollar also faced fresh selling pressure after it was confirmed the state of Victoria had extended its lockdown until September 2nd. China’s industrial production rose 6.4% YoY in July, down from 8.3% and missing the 7.8% forecast. Retail sales also missed, rising 8.5% YoY, down from 12.1% in June and missing 11.5% expected. And fixed asset management also came in below expectations at 10.3% compared with 11.3% forecast. Australian bond yields tracked the ASX 200 and AUD pairs lower. The Japanese yen was the strongest major thanks to safe-haven inflows.

GBP/JPY fell to an 8-day low and is currently beneath the monthly pivot point. GBP/USD edged lower from Friday’s high, although has found support at its 20-da eMA. Should prices hold above 1.3791 then we’d look for da break above its bearish channel to assume trend continuation.


We can see on the daily chart that GBP/AUD remains in a strong uptrend. Prices have been held above the 1.8757 low whilst it traded in a sideways correction and remained above the 20-day eMA. It has risen to a 4-day high ahead of the UK open and shows the potential to extend its rally and potentially resume its uptrend. A break above the retracement line would be a good start for bulls.


Learn how to trade forex


China’s data miss weighs on commodities:

Weak data from China weighed commodities overnight. As for metals, copper is trading -1.3% lower, platinum was down -1% and palladium fell -0.52%. Gold and silver were a touch lower, falling -0.18% and -0.1% respectively. WTI has gapped lower at the open and trades at 67.70, or -1.1% lower.


Up Next (Times in BST)

You can view all the scheduled events for today using our economic calendar, and keep up to date with the latest market news and analysis here.


How to trade with City Index

Follow these easy steps to start trading with City Index today:

  1. Open a City Index account, or log-in if you’re already a customer.
  2. Search for the market you want to trade in our award-winning platform.
  3. Choose your position and size, and your stop and limit levels.
  4. Place the trade.

More from Commodities

Disclaimer

This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.

StoneX Financial Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the StoneX group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), StoneX Financial Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact StoneX Financial Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.

In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither StoneX Financial Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.

StoneX Financial Pte. Ltd. is not under any obligation to update this report.

Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit cityindex.com.sg for the complete Risk Disclosure Statement.