Stocks and crude oil continue to decline
The shockwaves from China’s surprise twin devaluations continue to reverberate through stocks, currencies and commodities around the world heading into the weekend. The pace of declines has slowed, however, and some markets appear to be trying to stabilize a bit.
The PBOC raised its USDCNY currency trading midpoint slightly overnight to 6.3975 from 6.4010 and indicating to traders that this round of devaluation has ended. Traders remain concerned about the health of China’s economy, particularly in energy markets where crude oil prices continue to decline.
In currency trading, USD has dropped back slightly enabling many of the majors and gold to rise moderately. NZD and CAD have been underperforming based on soft retail sales and soft manufacturing sales respectively.
Stock markets in Europe and the US are trading lower today with mixed GDP from across the continent muddying the waters. US markets may remain active through the day with industrial production, consumer sentiment and the weekly drill rig count still on the way.
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Tesla Motors announced a 2.7 million share offering overnight with a maximum price of $242 which could raise up to $642 million
Significant announcements released overnight include:
US producer prices (0.8%) vs street (0.9%)
US PPI ex food and energy 0.6% vs street 0.5%
Canada manufacturing sales 1.2% vs street 2.7%
Germany GDP 1.6% vs street 1,5%
France GDP 1.0% vs street 1.1%
Italy GDP 0.5% as expected
Poland GDP 3.3% vs street 3.6%
Poland core CPI 0.4% as expected
Eurozone GDP 1.2% vs street 1.3%
Eurozone consumer prices 0.2% as expected
Eurozone core CPI 1.0% as expected
NZ retail sales 0.1% vs street 0.5%
Singapore retail sales 6.9% vs street 3.5%
Upcoming significant announcements include:
9:00 am EDT Canada existing home sales previous (0.8%)
9:15 am EDT US industrial production street 0.3%
9:15 am EDT US manufacturing production street 0.4%
10:00 am EDT US UofMich consumer sentiment street 93.5
10:00 am EDT US UofMich 1 yr inflation estimate street 2.8%
1:00 pm EDT US Baker hughes drill rig count previous 884