Daily Market Comment – Oil sinks, dollar surges as growth fears return but stocks keep partying



  • Dismal data out of China and the US stifle risk appetite as recession risks return
  • But Wall Street immune to the doom and gloom as tech stocks rally  
  • Dimming outlook weighs on commodities as oil hits 6½-month low

Dollar powers ahead on fresh growth scare

The month-long risk rally suffered a major setback on Monday after economic indicators out of the world’s two biggest economies did anything but shore up confidence in the growth outlook, reviving fears about a global recession. A raft of data on China’s economic health missed the mark in July, underlining fears that the road to recovery from the recent Covid outbreaks will be less smooth compared to the bounce back from the 2020 lockdown.

The deepening crisis in the property sector is hitting everything from investment to demand for construction materials to consumer sentiment, while the government’s reluctance to give up on its zero-Covid policy certainly isn’t helping.

But it’s not just China that investors are getting jittery about, as the US economy may also be fast losing steam. The Empire State manufacturing index plummeted in August to its lowest since May 2020 when the country was in its first Covid shutdown, while a key housing gauge also brushed a similar low.

Safe havens like the US dollar and Japanese yen jumped on the back of the worrying data, reversing some of their recent losses when they came under pressure from the improving risk tone. The greenback has now more than reversed the losses against a basket of currencies that followed last week’s soft US CPI readings, even as safety bids pulled Treasury yields lower.

The dollar index was edging above 106.70 on Tuesday to a more than one-week high.

Oil leads commodities slump

Commodities have been on the backfoot this week amid renewed concerns about demand. Metal prices such as copper are under pressure, though their losses have been modest compared to oil. WTI and Brent crude futures plunged yesterday, hitting more than six-month lows, as China worries dealt a fresh blow to the energy commodity.

Signs that Iran and the West are inching closer to a new agreement on a nuclear pact are adding to oil’s downside.

Aussie and kiwi come crashing down

The combination of falling commodity prices and weakening growth picture in China – the world’s biggest consumer of commodities – has pummelled the currencies that are reliant on both. The Australian and New Zealand dollars fell sharply on Monday, with the aussie struggling to hold onto the $0.70 level today and the kiwi nosediving below $0.64.

The Reserve Bank of New Zealand is expected to hike rates by 50 basis points early on Wednesday, but it remains to be seen if there can be any boost for the kiwi from the decision as a less hawkish tone is possible.

The Canadian dollar was also one of yesterday’s worst performers, but it was steadier around C$1.29 ahead of domestic CPI data due later today.

The euro and pound, meanwhile, slipped further against the greenback, with the latter showing little reaction to reasonably solid UK employment numbers.

Wall Street defies gravity, eyes retail earnings

However, there were few signs of panic in equity markets as US indices notched up another set of impressive gains on Monday, extending the now two-month-old rebound. Tech stocks led the way, with Tesla jumping 3% after CEO Elon Musk boasted of the company’s latest milestone that it has now produced more than 3 million vehicles.

Lower bond yields are likely offsetting some of the impact from the negative headlines on the economy, while investors continue to draw support from the latest earnings season as well as from the growing signs that inflation in the US has peaked.

Still, Wall Street’s resiliency is questionable when considering that the market-implied Fed terminal rate has gone up in August and Fed officials have not altered their language following last week’s CPI miss.

As for Q2 earnings dispelling fears that the US is headed for a recession, that view will be put to the test when the major retailers report their results this week, starting with Walmart and Home Depot today.

In Europe, shares were in positive territory despite Dutch TTF natural gas futures surging again on Tuesday to the highest since March. Asian stocks were mixed, with Chinese indices finding some solace from the PBOC’s rate cut yesterday.

면책조항: XM Group 회사는 체결 전용 서비스와 온라인 거래 플랫폼에 대한 접근을 제공하여, 개인이 웹사이트에서 또는 웹사이트를 통해 이용 가능한 콘텐츠를 보거나 사용할 수 있도록 허용합니다. 이에 대해 변경하거나 확장할 의도는 없습니다. 이러한 접근 및 사용에는 다음 사항이 항상 적용됩니다: (i) 이용 약관, (ii) 위험 경고, (iii) 완전 면책조항. 따라서, 이러한 콘텐츠는 일반적인 정보에 불과합니다. 특히, 온라인 거래 플랫폼의 콘텐츠는 금융 시장에서의 거래에 대한 권유나 제안이 아닙니다. 금융 시장에서의 거래는 자본에 상당한 위험을 수반합니다.

온라인 거래 플랫폼에 공개된 모든 자료는 교육/정보 목적으로만 제공되며, 금융, 투자세 또는 거래 조언 및 권고, 거래 가격 기록, 금융 상품 또는 원치 않는 금융 프로모션의 거래 제안 또는 권유를 포함하지 않으며, 포함해서도 안됩니다.

이 웹사이트에 포함된 모든 의견, 뉴스, 리서치, 분석, 가격, 기타 정보 또는 제3자 사이트에 대한 링크와 같이 XM이 준비하는 콘텐츠 뿐만 아니라, 제3자 콘텐츠는 일반 시장 논평으로서 "현재" 기준으로 제공되며, 투자 조언으로 여겨지지 않습니다. 모든 콘텐츠가 투자 리서치로 해석되는 경우, 투자 리서치의 독립성을 촉진하기 위해 고안된 법적 요건에 따라 콘텐츠가 의도되지 않았으며, 준비되지 않았다는 점을 인지하고 동의해야 합니다. 따라서, 관련 법률 및 규정에 따른 마케팅 커뮤니케이션이라고 간주됩니다. 여기에서 접근할 수 있는 앞서 언급한 정보에 대한 비독립 투자 리서치 및 위험 경고 알림을 읽고, 이해하시기 바랍니다.

우리는 웹사이트에서 최고의 경험을 전해드리기 위해 쿠키를 사용하고 있습니다. 자세히 읽거나 쿠키 설정을 변경하세요.

리스크 경고: 고객님의 자본이 위험에 노출 될 수 있습니다. 레버리지 상품은 모든 분들에게 적합하지 않을수 있습니다. 당사의 리스크 공시를 참고하시기 바랍니다.