Author: Consultant

Published: 9/15/2023 12:24 AM ET

China’s industrial production and retail sales growth improved more than expected in August, official data revealed on Friday.

Industrial production posted an annual increase of 4.5 percent, the National Bureau of Statistics reported. Output was expected to climb moderately by 3.9 percent in August after rising 3.7 percent in July.

Likewise, growth in retail sales improved to 4.6 percent in August from 2.5 percent in the previous month. This was also better than economists’ forecast of 3.0 percent.

During January to August period, fixed asset investment increased 3.2 percent from the same period last year, data showed. However, the rate was slightly weaker than the expected 3.3 percent.

Published: 9/15/2023 6:05 AM ET

Gold prices inched higher on Friday, as the dollar retreated after refreshing a six-month high on strong U.S. data released overnight.

Spot gold rose 0.4 percent to $1,918.38 per ounce, while U.S. gold futures were up 0.4 percent at $1,939.90.

The dollar index weakened on improved risk aversion on the back of improved China data and amid expectations that interest rates in the U.S. and Europe may have peaked.

Robust U.S. economic data failed to budge expectations that the Federal Reserve will leave its key interest rate unchanged next week.

On Thursday, the European Central Bank (ECB) piled on a 10th straight interest-rate increase but signaled a potential end to its rate-hike campaign aimed at curbing inflation.

Elsewhere, in the U.K., some recent speeches from MPC members have added fuel to the speculation that the Bank of England is starting to consider pausing interest rate hikes.

Earlier today, China reported industrial production and retail sales figures for August that topped forecasts.

Industrial production posted an annual increase of 4.5 percent, while analysts expected output to climb moderately by 3.9 percent after a 3.7 percent increase in July.

Likewise, growth in retail sales improved to 4.6 percent in August from 2.5 percent in the previous month. This was also better than economists’ forecast of 3.0 percent.

Another batch of U.S. economic data including reports on import and export prices, industrial production and consumer sentiment may sway markets in the New York session.

Published: 9/15/2023 5:51 AM ET

Oil prices rose on Friday and were on track for a third consecutive week of gains on news that Chinese refiners broke refining rate records in August.

Benchmark Brent crude futures edged up 0.2 percent to $93.94 a barrel, while WTI crude futures were up 0.3 percent at $90.44.

Both benchmarks traded at their highest level since early-November 2022 on optimism about improved demand and consumption in China and expectations for a draw in global supply for the remainder of the year.

Total refinery throughput in China was a record 64.69 million metric tons last month, data from the National Bureau of Statistics showed, up 19.6 percent from the year-ago period and marking the fastest annual growth since March 2021.

Additionally, China’s aviation regulator said today that air passenger numbers in August nearly doubled from a year earlier, reaching a historical high of 63.96 million.

China announced a cut to banks’ reserve requirement ratio and the latest industrial output and retail sales growth figures for August topped forecasts, raising optimism that the country is on a path of recovery after months of feeble growth.

Canadian shares look headed for a positive start on Friday, tracking European markets and higher commodity prices following encouraging economic data from China and easing concerns about interest rates.

CGI Group, Inc.(GIB, GIB-A.TO) announced Friday a 10-year, C$380 million strategic partnership with convenience retailer Alimentation Couche-Tard (ATD.TO) to deliver managed IT services.

On the economic front, data on new motor vehicles sales and manufacturing sales, both for the month of July, are due at 8:30 AM ET.

Canadian stocks closed on a buoyant note on Thursday as investors indulged in strong buying in various sectors, reacting positively to fairly upbeat U.S. retail sales data.

The benchmark S&P/TSX Composite Index ended with a gain of 288.90 points or at 20,567.84, slightly off the day’s high of 20,576.52.

Asian stocks closed higher on Friday as investors cheered strong economic data from the U.S. and China as well as signs that the world’s biggest central banks may soon end their tightening campaigns.

European stocks are up firmly in positive territory Friday afternoon after the ECB signaled that Thursday’s rate hike could be the last raise in the current cycle. Encouraging retail sales and industrial production data from China also contribute to the positive sentiment in the markets.

In commodities, West Texas Intermediate Crude oil futures are up $0.45 or 0.5% at $90.61 a barrel.

Gold futures are gaining $8.50 or 0.43% at 1,941.30 an ounce, while Silver futures are up $0.466 or 2.03% at $23.460 an ounce.

Published: 9/14/2023 5:39 AM ET

Gold prices were subdued on Thursday after U.S. consumer inflation data came in hotter than expected, keeping bets of more Fed rate hike alive.

Spot gold slipped 0.1 percent to $1,906.85 per ounce, while U.S. gold futures were down 0.3 percent at $1,927.70.

Data showed U.S. consumer prices increased 3.7 percent year-per-year last month, slightly ahead of the estimated 3.6 percent. Core inflation rose 4.3 percent, matching expectations.

Following the report, CME Group’s FedWatch Tool currently indicates a 97.0 percent chance the Federal Reserve will leave interest rates unchanged next week.

The outlook for November remains more mixed, with the FedWatch Tool indicating a 40.8 percent chance of another quarter point rate hike.

Trading later in the day may be impacted by reaction to the ECB rate decision as well as a slew of U.S. economic data, including reports on weekly jobless claims, retail sales and producer price inflation.

The European Central Bank is likely to raise interest rates for a 10th consecutive meeting but it’s a close call, given growing concerns about growth.

The central bank will update its forecasts for growth and inflation at today’s meeting.

Oil rebounded on Thursday as expectations of a tighter global crude supply outlook for the rest of 2023 overshadowed concerns over weaker economic growth and rising U.S. inventories.

Saudi Arabia and Russia’s extension of oil output cuts will result in a market deficit through the fourth quarter, the International Energy Agency said on Wednesday before a bearish U.S. inventories report prompted a slight pullback in prices.

“That this genuinely bearish stock report only led to a brief temptation to sell speaks volumes and underlines the market mentality,” said Tamas Varga of oil broker PVM.

The tightening oil balance will remain the dominant price driver for the rest of 2023, he added.

Brent crude rose 66 cents, or 0.7 per cent, to $92.54 a barrel by 1010 GMT. U.S. West Texas Intermediate crude (WTI) was up 62 cents, or 0.7 per cent, at $89.14.

Both benchmarks touched 10-month highs on Wednesday before release of the U.S. supply report showing rising crude and refined product stocks sent prices lower.

Priyanka Sachdeva, senior market analyst at Phillip Nova, said supply fears are underpinning oil prices as producers “adamantly stick to restricted production”.

A day before the IEA report, the Organization of the Petroleum Exporting Countries (OPEC) issued updated forecasts of solid demand and also pointed to a 2023 supply deficit if production cuts are maintained.

“The oil market looks decidedly tight over the next two to three quarters as supply constraints persist amid robust demand,” ANZ Research analysts said.

In focus later on Thursday will be the latest interest rate decision from the European Central Bank.

Analyst and investor expectations had been leaning towards a pause in rate increases until Reuters reported on Tuesday that the ECB was set to raise its inflation forecast for next year to more than 3 per cent, bolstering the argument for higher interest rates.

• The People’s Bank of China (PBOC) said it would cut the reserve requirement ratio (RRR) for all banks, except those that have implemented a 5% reserve ratio, by 25 basis points from Sept. 15.
• The move came after the world’s second-biggest economy has struggled after its post-pandemic recovery faltered.

China’s central bank said on Thursday it would cut the amount of cash that banks must hold as reserves for the second time this year to help keep liquidity ample and support a nascent economic recovery.

The People’s Bank of China (PBOC) said it would cut the reserve requirement ratio (RRR) for all banks, except those that have implemented a 5% reserve ratio, by 25 basis points from Sept. 15.

The move came after the world’s second-biggest economy has struggled after its post-pandemic recovery faltered.

To support the economy, the government has rolled out a series of policy measures in recent months, including steps to spur housing demand.

This is a breaking news story, please check back later for more.

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• The consumer price index rose 0.6% in August, its biggest monthly gain of 2023. The inflation gauge rose 3.7% from a year ago.
• Core CPI increased 0.3% and 4.3% respectively, against estimates for 0.2% and 4.3%. Fed officials focus more on core as it provides a better indication of where inflation is heading over the long term.
• Energy prices fed much of gain, rising 5.6% on the month, an increase that included a 10.6% surge in gasoline.
• The jump in headline inflation hit worker paychecks. Real average hourly earnings declined 0.5% for the month.

CPI report August 2023: Inflation rose 0.3% (cnbc.com)