VinsonFinancialsFX
Member
- Messages
- 93
- Likes
- 0
Financial News September 7, 2015
China's money growth to moderate
Chinas's new bank lending likely dropped to CNY1000bn, from CNY1,480bn in July. However, considering the CNY400bn LGBs issued under the debt-swap programme in August, the actual increase in bank loans was probably close to CNY1.4trn.
"China's money and credit data are likely to have normalised lower in August, after the surprisingly strong readings in July given stock-market rescue measures. M2growth is expected to have moderated to 12.6% yoy in August from the surprisingly strong rate of 13.3% yoy in July", says Societe Generale.
Part of it should have been continued support to financial institutions' stock market rescue action.
Germany's industrial output stronger in July
Industrial production in Germany returned to growth in July, official data showed on Monday. Industrial output in the euro area's powerhouse improved in July, according to the latest report from the German Federal Statistical Office released on Monday.
Industrial output in Germany posted 0.7% growth in the reported period, seasonally adjusted, after reporting a revised 0.9% negative growth in the preceding month, according to data. However, the number missed estimates of 0.9% growth.
Meanwhile, factory orders in Germany deteriorated in July when measured on a monthly and seasonally adjusted basis, official data revealed on Friday.
Industrial orders in the euro area's number one economy powerhouse dropped 1.4% in the reported period, measured on a monthly and seasonally adjusted basis, while analysts had expected the reading to post a 0.6% decrease. In the prior month, the revised gauge rose 1.8%.
Meanwhile, the German manufacturing sector saw a significant increase in its pace of growth in August with the respective PMI reading coming in above the previous month's results, final data confirmed last week.
The so-called Purchasing Managers' Index (PMI) for the German manufacturing sector booked 53.3 points during the eighth month of the year, following the 51.8 recorded in July, Markit Economics reported.
That's the highest data since April last year, when the gauge climbed to 54.1.
The euro managed to move above $1.11 following an earlier slide below, but the resistance level of $1.1150 remains untouched. Around the time of the European open the euro was moderately flat, down 0.18% at $1.1140.
Market Review September 7, 2015
The G20 meeting held in Ankara, Turkey over the weekend highlighted the failure of the major capitalist powers to initiate measures to halt the recessionary forces overtaking the world economy. Moreover, G20 Finance ministers insisted the global economy has nothing to fear from a China slowdown, as an effort to restore confidence of investors in the global markets.
European ministers showed firm support for Beijing, which convinced many G20 officials that its devaluation and new currency management arrangements constituted a step towards a more market-determined exchange rate rather than a strategy to boost exports. Furthermore, the United States support was more moderated, as the latest developments in China had direct and indirect impact on the United States growth. In addition, US Federal Reserve officials are trying to calculate possible China-linked risks ahead of their meeting on September 16-17. The central bank would not want to lift rates at a time of severe market volatility. Jack Lew, US Treasury secretary, pressed Lou Jiwei, his Chinese counterpart, for an indication that China would allow renminbi rate to fluctuate affected by market pressures.
Eventually financial leaders from the world’s 20 biggest economies have agreed to step up reform efforts to boost slow economic growth, saying reliance on ultra-low interest rates would not be enough to accelerate expansion. Governments will prepare their final investment strategies by November, when G20 leaders are to meet to discuss them in Antalya in Turkey.
Released during the Asian session this morning, Australia’s AIG Construction Index come in at 53.8 versus the previous of 47.1 while ANZ Job Advertisement rose 1.0% versus the previous decline of -0.5%. AUD/USD hit fresh six-year lows by reaching the 0.6907 level, which was last seen in April 2009.
Released during the early European session, Japanese Leading Indicators rose 104.9%, while German Industrial Production rose 0.7% missing the estimated 1.2%. USD/JPY and EUR/USD remained in tight range near the 119.30 and 1.1150 area respectively.
Released from Switzerland, new figures showed that the Swiss National Bank's foreign currency reserves continue to grow at a decent clip as Reserves stood at CHF 540.4bn in August, from CHF 531.2bn in July. USD/CHF is currently trading near the 0.9725 area with the next resistance seen at the 0.9797 level.
The economic calendar for the day is rather empty as the United States and Canada banks will remain closed in observance of Labour Day.
Data releases to monitor:
EUR: Sentix Investor Confidence.
Trade Idea of the Day
EUR/GBP
Currently the pair is trading at 0.7339. Traders must monitor the 0.7394 resistance level and the support level of 0.7254 for possible breakouts. A possible scenario would be a movement towards the 0.7363 resistance level where a break may lead to the 0.7390 area and test the resistance level of 0.7394. An alternative scenario could be a movement towards the 0.7303 support level where a break could lead to the 0.7275 area.