LONDON, Aug 15 (Globe Live Media) – Weak consumer demand and factory activity in China sent copper and oil prices falling on Monday as investors worried about the health of the world’s second-largest economy.
* Weak Wall Street futures also weighed on European stocks as global stocks paused after four weeks of gains, helped by hopes that spike in U.S. inflation will sway the Federal Reserve. to cut a sharp rise in interest rates next month.
* Gold fell, but China’s problems pushed the dollar higher.
* S&P 500 and Nasdaq futures were down 0.4% before the open on Wall Street, awaiting results from major retailers like Walmart and Target for any signs of weakening consumer demand. Americans.
* The MSCI World Stock Index was little changed, paring a month-long advance that has helped reduce the measure’s slump for the year to about 13%.
* China’s central bank unexpectedly cut rates to revive demand, after data showed an unexpected slowdown in the economy in July, with factory and retail activity affected by the zero COVID policy and the crisis real estate.
* “I think China’s situation is different from the rest of the world. They have a self-imposed recession that they have created from the COVID zero policy,” said Patrick Armstrong of Plurimi Group. “I think if there is another leg down in the markets, it will be driven by the Fed. I think quantitative tightening will start in earnest in September and that’s going to take liquidity out of the market.”
* The pan-European STOXX 600 index rose 0.14% to 441.49 points, still down nearly 10% from the all-time high reached in January.
* Steady growth figures from Japan helped the Nikkei hit its highest in more than seven months. However, the Chinese rate cut did not prevent stocks from losing 0.13%, while the yuan and bond yields also fell.
* The Treasury bond market appears to remain doubtful that the Fed can fabricate a soft landing as the yield curve remains deeply inverted. Two-year returns were trading at 3.25%, well above those on 10-year notes, which were trading at 2.83%.
* The dollar index advanced 0.5% to 106.25 units, after weak Chinese data, while the euro fell 0.6% to 1.0193 dollars.
* In commodities, gold was down 1.5% at $1,773; Benchmark copper on the London Metal Exchange fell 2.5% to $7,890 a tonne; and crude lost around 5 dollars.