UNA to Organize Workshop on Future of Digital Media Post Coronavirus Pandemic    SGS Signs MoU to Use Best Technologies in Sterilizing Planes and Airports in Saudi Arabia    Amman Stock Market Rises    Minister: English language in Class 1 from next year    Kuwait proposes hefty fines for traffic violations    455 Jeddah shops shut for violating corona protocols    FDA shuts unlicensed warehouse in Jeddah    OIC, Bahrain condemn Houthi attack on Jazan    17,500 amphetamine pills seized; two held    Thousands call for Netanyahu to resign    SAGO Completes Procedures for 6th Barley Tender in 2020    G20 Trade and Investment Ministers to Meet Tomorrow    Saudi Press: Iranian Missile Program Threatens Regional and Global Security    Weather Forecast for Monday    Has COVID-19 made us embrace the future?    UAE Team Emirates' Pogacar wins the Tour De France    UAE Announces 674 New COVID-19 Cases, 761 Recoveries, No Deaths in last 24 hours    Path ahead for Saudi Arabia post COVID is one of acceleration and transformation — Serco ME    England to make breaking COVID-19 self-isolation illegal with fines up to £10,000    B20 and IEA call on the G20 to accelerate clean energy transitions for a resilient economic recovery    Ministry of Culture to set up Red Sea Museum at Bab Al-Bunt in Jeddah    KSrelief Distributes Shelter Tents to People Affected by Floods in Sudan    Bahrain Bourse Rises    Egypt Condemns Houthi Militia Targeting one of Border Villages in KSA    New expat body to help women, kids tackle pandemic trauma    ADNEC acquires ISNR Abu Dhabi    Every work has its fruits, so choose wisely    Pogacar poised to win Tour De France after historic time-trial ride UAE Team Emirates starlet set to become youngest Tour de France winner of the 21st century    Saudi Arabia Takes Part in UN Broadband Commission for Sustainable Development Meeting    UN, partners promote sport as a tool to prevent violent extremism    National Day festivities to include fashion show    Wydad appeal over CAF 2019 Champions' final dismissed by CAS    Diabetes in Saudi Arabia: Prevalence, Prevention, and Progress    Zahraa, a Saudi graduate in media, follows her passion in car décor job    Saudi Youths Transfer Saudi Arabia's Culture via Animation Production    Saudi Scholarship Program to Promote Football Talents, abroad, Co-sign Accord with Spanish Real Sociedad    French Open to allow 11,500 fans per day between the three show courts    Saudi Films' Festival virtual Events Continued    Saudi Taekwondo Team Win 3-Medal, in Arab 1st virtually Held Championships    Saudi Films' Festival Events Continue, amid Wide-Scale Cultural Participation    Mediation center contributes to 22% decrease in divorces    Saudi Films' Festival Kicked off, in its 6th Edition    Saudi woman seeks to restrain wealthy hubby from remarrying    India's top minister Amit Shah tests positive for coronavirus    Eid Al-Adha Prayer Performed at the Grand Holy Mosque    Pilgrims Perform Dhuhr and Asr Prayers in Arafat Holy Site    Senior Scholars Council Issues Decision No. 246 Regarding Attendance of Friday Prayer and Prayers at Mosques in a Case of Spread of Epidemic or Fear of its Spread    Custodian of the Two Holy Mosques Addresses Citizens and Muslims on Eid Al-Fitr    







Thank you for reporting!
This image will be automatically disabled when it gets reported by several people.





China manufacturing PMI at record, equities mixed
Published in The Saudi Gazette on 03 - 08 - 2020

GENEVA — Equities in Tokyo (+2.10%) and Shanghai (+1.08%) kicked off the week on a positive note on the back of promising economic data. The Japanese GDP printed 2.2% y-o-y contraction in the second quarter versus -4.4% expected by analysts and the manufacturing PMI, 45.2, revealed a softer slowdown in activity in July.
Meanwhile, Caixin's Chinese manufacturing PMI printed 52.8 in July, the highest figure on record, surpassing the market expectation of 52.3 as post-COVID recovery in activity gained momentum.
The ASX 200 (-0.31%) lagged however despite a solid manufacturing PMI read, as energy and mining stocks fell on softer oil and commodity prices. Elsewhere, losses were dominant. Stocks in Philippines led losses with a 3.58% drop on Monday as authorities ordered stricter lockdown in Manila.
European and US stock markets are poised for a flat start to the week, as investors await manufacturing and services PMI on Monday and Wednesday, the Bank of England (BoE) rate decision on Thursday and the US jobs data on Friday.
Strong rebound in Western economic activity should better the investor mood this week, even though the short-term direction will likely remain blurred by the persistent COVID threat and global trade tensions. The US is expected to announce new measures on a broad list of Chinese-owned software companies, which threaten the US national security in the coming days.
But price retreats are still interesting dip-buying opportunities for investors chasing new highs in US stocks. The S&P500 remains bid above the 3200 mark and there is nothing stop the Nasdaq from rebounding above the 11000 level and renew record.
In the UK, the downside correction in oil could be a threat for the appetite and limit the topside near the 6000p, while the strong sterling seems to have a marginal negative impact on FTSE demand at the moment.
The US dollar is better bid on Monday and the 10-year treasury yield rose near 0.55%. Fitch maintained the US long-term debt at AAA but downgraded the outlook from stable to negative.
But the deteriorating US debt outlook didn't have much impact on US sovereign appetite as the rising sovereign debt levels increases the global default risk and the US debt, though riskier, is still considered the safest across the board.
The recovery in US dollar triggered decent profit taking in EURUSD, pulling the pair to 1.1740 at the start of the week. The downside correction could extend another figure to the 1.1630 mark, the minor 23.6% Fibonacci retracement on April – July rebound.
Pound bulls will likely lose strength above the 1.30 mark, as the medium-term outlook for sterling remains negative on lingering Brexit risks. Therefore, the slightest improvement in US dollar appetite could send Cable to 1.30/1.28 range, while sterling will likely struggle to defend its advance against the single currency.
Solid buyers are touted near and below the 0.90 in EURGBP. The Bank of England (BoE) is broadly expected to maintain the policy rate and its asset purchases unchanged at this week's MPC meeting, however investors expect 70-billion-pound rise in sovereign purchases in November or December.
Gold consolidates gains above the $1,970 per oz. A further rise towards the $2,000 is possible, but gains should remain short-lived due to overbought market conditions and signs of a possible return to the US dollar.
Softer global risk appetite and increased downside pressure on global oil demand has been preparing the ground for a slide below the $40 per barrel in WTI crude.
Encouraging manufacturing data should slow down the softening in oil prices, but even signs of economic recovery will unlikely prevent a downside correction below the $40 mark as the premature tapering of the OPEC production cuts increases the worries of a higher global glut in the coming months.
— This writer is senior analyst at Swissquote Bank


Clic here to read the story from its source.