China retail sales, industrial output, investment data for August 2024 – another round of disappointing results.

Retail Sales +2.1% (YoY) (Aug)

• expected 2.5%, prior 2.7%

Industrial Production +4.5% (YoY) (Aug)

• expected 4.8%, prior 5.1%

Fixed Asset Investment +3.4$(YTD) (YoY) (Aug)

• expected 3.5%, prior 3.6%

Unemployment 5.3%

• expected 5.2%, prior 5.2%

Also published were home prices data, which fell at their sharpest rate in 9 years, at -5.3% y/y in August, compared with the previous month’s -4.9%.

• For the m/m, down 0.7% (July was also -0.7% m/m)

China’s property sector continues to be a black hole for the economy.

Piecemeal stimulus looks set to continue:

• Reports that China set to cut interest rates on more than $5 trln of outstanding mortgages

China has a growth target of ‚around 5%‘ this year. China invariably hits its growth target, officially anyway.

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China’s National Bureau of Statistics (NBS) painted an upbeat picture.

• In August, under the strong leadership of the Central Committee of the Communist Party of China (CPC) with Comrade Xi Jinping at its core, all regions and departments strictly implemented the decisions and arrangements made by the CPC Central Committee and the State Council. All regions and departments adhered to the general principle of pursuing progress while ensuring stability, fully and faithfully applied the new development philosophy on all fronts, strengthened macro-regulation and strove to promote high-quality development. As a result, the production and demands sustained a recovery, employment and prices were basically stable, and high-quality development continued to move ahead. The national economy maintained stability in general while making steady progress.

These are the main headings from the statement:

1. Industrial Production Increased Steadily with Fast Growth in Equipment Manufacturing and High-Tech Manufacturing.

2. Service Sector Continued to Recover and Modern Services Developed Well.

3. Market Sales Kept Increasing and Online Retail Sales Grew Rapidly.

4. Investment in Fixed Assets Scaled up and Investment in High-Tech Industries Grew Fast.

5. Imports and Exports of Goods Grew Fast and Trade Structure Continued to Optimize.

6. Employment Was Generally Stable and Urban Surveyed Unemployment Rate Increased Slightly.

7. Increase of Consumer Price Expanded and Producer Prices for Industrial Products Declined.

This article was written by Eamonn Sheridan at www.forexlive.com.

NASDAQ and S&P indices end the week with five straight days of gains

• Goldman Sachs sees a 25 basis point cut from the Fed next week
• Next week will be dominated by the FOMC rate decision.
• Crude oil futures settled at $68.65
• ECB’s Makhlouf: ECB is not pre-committing to a particular rate path.
• Go big or go small? JP Morgan reiterates its call for 50 basis point cut next week.
• CNBC’s retail monitor sees consumer spending cooling
• Baker Hughes rig count for the current week
• Fitch: If this is an extended strike you could see Boeing downgraded
• That’s a wrap for the European stock markets.
• Paulson on CNBC: He favors a 50 basis point cut by the Fed
• University of Michigan preliminary sentiment for September 69.0 versus 68.5 estimate
• A 50 basis point cut is now 50-50 for the Fed decision next week
• Kickstart the FX trading day for Sept 13 w/a technical look at the EURUSD, USDJPY & GBPUSD
• Canada capacity utilization Q2 79.1% vs 78.6% last quarter
• Canada July wholesale sales +0.4% versus -1.1% expected
• US August import prices -0.3% versus -0.2% estimate. Export prices -0.7% vs -0.1% estimate
• University of Michigan consumer sentiment Preliminary. Import-export prices in the US
• The JPY is the strongest and the AUD is the weakest as the NA session begins
• ForexLive European FX news wrap: Yen firms as yields stay heavy
• ECB’s Holzmann: There could be room for another rate cut in December

As the day and week comes to a close, the JPY is ending the day as the strongest of the major currencies and the NZD is the weakest. The US is ending the day mixed with most of the declines coming vs the JPY and the CHF and gains vs the AUD and NZD. The greenback was near unchanged vs the EUR, GBP, and CAD today.

The NZDUSD moved lower today after reaching new highs near the 100 bar MA on the 4-hour chart near 0.6195. The subsequent fall took the price back down to the 100-hour MA at 0.6151. The 100 hour MA will be a key barometer for the pair going into next weeks trading.

For the USDJPY, it traded to a low of 140.275 and in the process tested the December 2023 low at 140.248. The pair rebounded into the close to 140.90. WIth the low today within a few pips of the December 2023 low, traders may look at the area as a double bottom to lean against into the new trading week.

For the EURUSD , the high prices today, stalled at the swing area that was defined back in August between 1.1097 and 1.11042 (see red numbered circles). The move back down has the pair trading at 1.1072 near the close for the week. The 100 hour MA at 1.1059 will be a key support target early next week. The swing area up to 1.11042 will be the key resistance that needs to be broken to increase the bullish bias.

The GBPUSD buyers took the price above a swing area and the 100 bar MA on the 4-hour chart at 1.31399, but falled. The price is trading between that MA and the 200 hour MA below at 1.31104. Those MAs will be the close support and resistance into the new week. A move below the 200 hour MA will also have the 100 hour MA at 1.30844 to contend with as support. It would take a move below it to give the sellers more control.

Looking at the US yield curve, yields today moved lower with the yield curve steepening. The 2-10 spread is now 7.2 basis points which is the most positive since June 2022. The 2-30 year spread isi near +40 basis points,also the highest since June 2022.

A snapshot of the yields near the end of day shows:

• 2-year yield 3.5886%, -5.9 basis points
• 5 year yield 3.436%, -3.0 basis points
• 10-year yield 3.658%, -2.1 basis points
• 30-year yield 3.984%, -1.1 basis points

For the week:

• 2 year yield fell -5.4 basis points
• 5 year yield fell -3.2 basis points
• 10 year yield fell -2.0 basisi points
• 30 year yield fell -0.6 basis points.

US stocks staged a solid rebound after the tumble last week. The Nasdaq and the S&P were both up every day of the week with the S&P rising 4.02% for the week and the Nasdaq rising 5.95%. The S&P fell -4.25% last week and the Nasdaq was down -5.77%. So back to the very begining of the calendar month. Remember September is traditionally, a negative month.

Next week, the FOMC meets (25 or 50 bp cut). The BOE and the BOJ will also meet with both expected to keep rates unchanage.

US retail sales will also be released along with Australia jobs and Canada CPI data (see the calendar here)

Thank you for your support this week. Wishing all a happy and healthy weekend. I hope your team wins.

This article was written by Greg Michalowski at www.forexlive.com.

The major US stock indices closed the day with gains. The NASDAQ and the S&P had a perfect week with five straight winning days. The NASDAQ index erased it -5.77% decline from last week with a gain of 5.95%.

A snapshot of the closing levels today shows:

• Dow industrial average rose 297.01 points or 0.72% at 41393.78
• S&P index rose 30.26 points or 0.54% at 5626.02
• NASDAQ index rose 114.30 points or 0.65% at 17683.98

The Russell 2000 rose 53.06 points or 2.49% at 2182.49.

For the trading week:

• Dow rose 2.60% after falling 2.93% last week.
• S&P index rose 4.02% after falling -4.25% last week.
• NASDAQ index rose 5.95% after falling -5.77% last week
• Russell 2000 rose 4.355% after falling 5.69% last week.

Some big winners this week included:

• ARM holdings +25.88%
• Broadcom, +22.41%
• Chewy, +22.03%
• Super Micro Comuputer, is 18.29%
• Palantir, +17.21%
• Nvidia, +15.82%
• AMD, +13.37%
• First Solar, +9.64%
• Tesla, +9.28%
• United Airlines, +9.17%
• Amazon, +8.81%

Losers this week included:

• Raytheon, -17.7%
• GameStop, -13.67%
• Moderna, -6.52%
• Adobe, -4.71%
• J.P. Morgan -3.82%
• Southwest Airlines -3.40%
• Biogen -2.58%
• Citigroup -2.37%
• Wells Fargo -2.22%
• Occidental -1.88%
• General Mills -1.84%
• General Motors -1.76%

This article was written by Greg Michalowski at www.forexlive.com.

Goldman Sachs is keeping it 25 basis point cut forecast for the Fed next week. They also see cuts of 25 basis points in both November and December.

This article was written by Greg Michalowski at www.forexlive.com.