The USD is steady, oil prices slip, while equity markets and US yields are mixed as risk sentiment stalls. Currency markets are sidelined, oil prices weaken, and wheat prices strengthen in early trading. Risk sentiment wanes after one of China's largest private wealth managers alarms regulators after it missed payments, and following a Russian warship firing warning shots and boarding a neutral merchant vessel in the Black Sea. China said it would set up a task force to examine risks a Zhongzhi Enterprise Group, one of the largest one of the country's largest private wealth managers, after missing payments on investments products. Also impacting risk, Country Garden Holding Co once China's largest private-sector developer by sales is seeking to extend a maturing bond and is at risk of joining a slew of defaulters if fails to coupon payments. Today sees no key economic releases, so the focus will shift to Tuesday, China retail sales & industrial production, Japan's GDP, UK Jobless claims & unemployment, UK retail sales, empire manufacturing, and Canada's CPI.
In other news. Russian Rouble hits 16-month low as military spending rises and exports fall. China stocks hit after developer Country Garden suspends Bond trading-FT. Argentina's radical right-winger shakes up the presidential race with a primary win. Taiwan will not back down to threats, Taiwan vp says on US trip. Ukraine condemns 'provocation' Russian actions in the Black Sea. Treasury Secretary Yellen warns of risks of over-concentration of clean energy supply chains. China Central Bank seen leaving policy loan rate unchanged on Tuesday. Goldman pencils in the first Fed Rate Cut for the second quarter of 2024. Maui wildfires death toll reaches 96, expected to rise as search continues. Latvian prime minister announces his resignation for later this week.
In currency news. Chinese Yuan hits fresh 6-week lows on growing economic concerns. Japanese yen breaches 2023 lows. Russian rouble falls past 100 vs USD as export woes & the Kremlin blames loose monetary policy. Commodity currencies are under pressure on China's growth worries. CNY falls 0.3%, while Asian currencies slip 0.2% on average vs USD. Trading currencies are mixed with NOK & ZAR slipping 0.1%, while JPY, MXN, CHF, NZD & AUD are flat, and SEK firms 0.25% vs USD.
Oil prices slip in early trading on concerns about China's faltering economic recovery, stalling seven weeks of gains. CAD holds relatively steady near 2-month lows as growing China economic concerns keep pressure on commodity currencies. The lack of economic data is expected to see the loonie hold within its current trading range ahead of key economic data on Tuesday. Tomorrow sees the Canadian Consumer Price Index which is expected to hedge higher from 2.8% to 3% y/y July.
EURCAD is sidelined as markets await key economic data from the US, China & Canada on Tuesday.
Euro straddles 1.0950 in quiet trading as markets await direction from Tuesday's US & China data. Euro slipped below 1.0930 in early trading, its weakest level for 10 days as news of more Chinese defaults dented global risk sentiment. Bloomberg reported results of a recently conducted survey showed that economists expect the ECB to raise key interest rates one more time in September which is helped to provide underlying support to the EURO. Today we expect markets to be sidelined ahead of Tuesday's China & US key data releases.
GBPEUR holds steady in early trading as the focus shifts to Tuesday's UK employment data.
GBP advances through 1.2700 after the USD lost early gains as markets stalled ahead of a flurry of key economic data releases on Tuesday. On Tuesday's UK employment data optimism, the pound bounced off early lows to strengthen through 1.2700. UK employment is expected to rise 50k in June vs 102K in May, while the unemployment rate is expected to hold at 4%. Wednesday sees the release of UK inflation data which is expected to ease from 7.9% to 6.8% y/y in July which will help provide some breathing space for the BoE. Today, expect the pound to hold within its current trading range ahead of Tuesday's US & China economic releases.
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