The China stimulus sent crude oil prices near its 10 months high yesterday. The People’s Bank of China said it will lower from Friday the reserve requirement ratio for banks in the country by 25 basis points for a second time this year, bringing the weighted average for the so-called RRR for banks to 7.4%. The move is intended to free up lending to the private sector by reducing the amount of cash banks must hold in reserve.
Adding to this, stronger U.S. U.S. producer prices and retail sales for August, also supported in gains. The producer price index for August rose 1.6% on an annualized basis, beating expectations for 1.2%, and it rose 0.7% from July versus expectations for a gain of 0.4%.
Retail sales rose 0.6%, versus estimates for 0.2% from the prior month, while the weekly number of Americans seeking unemployment benefits was 220,000 last week, lower than expectations.
The European central bank has hiked interest rates by 25 basis points to a record high as policymakers look to address elevated inflation in the eurozone despite signals that the region’s economy is weakening. The interest rates on the marginal lending facility and the deposit facility up to 4.50%, 4.75% and 4.00%, respectively.
The dollar inched higher after an ECB rate hike on Thursday that kept alive expectations that the Federal Reserve will follow suit with its own increase — if not at next week’s rate decision, then at least in November or December. Dollar index traded at 105.3420, up 0.56%.
MCX Gold future settled at 58588 down 0.01%. Silver at 70982 down 0.61%. Copper prices settled at 737.10 up 0.60%. Crude oil settled at 7501 up 2.22%. Natural gas settled at 225.60 up 1.94%
Economic data and events scheduled today
China
At 7.30am-
Industrial Production y/y. Data is foreseen at 3.9% from 3.7% previous.
Retail Sales y/y. Data is foreseen at 3% from 2.5% previous.
Fixed Asset Investment ytd/y. Data is foreseen at 3.4% from 3.4% previous.
Unemployment Rate. Data is foreseen at 5.3% from 5.3% previous.
Above data could have a positive impact for Yuan.
Japan
At 10.00am – Tertiary Industry Activity m/m. Data is foreseen at 0.2% from previous -0.4%.
Above data could have a neutral impact on the Yen.
U.K.
At 2.PM – Consumer Inflation Expectations. Previous was at 3.5%.
Above data could have a neutral impact on the Indian Rupee.
Eurozone
At 12.15pm – French Final CPI m/m. Data is foreseen at 1.0% from previous 1.0%.
At 2.30pm- Italian Trade Balance. Data is foreseen at 6.50B from previous 7.72B.
Trade Balance. Data is foreseen at 13.5B from previous 12.5B.
At 3.15pm- ECB President Lagarde Speaks
All day – ECOFIN Meetings
All day – Eurogroup Meetings
All above data could have a volatile impact on the Euro.
CANADA.
At 6.00pm – Foreign Securities Purchases. Data is foreseen at 12.41B previous was at 12.56B.
Same time – Manufacturing Sales m/m. Data is foreseen at 0.7% from previous -1.7%.
Above data could have a negative impact on the dollar.
U.S.
At 6.00pm –
Empire State Manufacturing Index. Data is foreseen at -9.9 previous was at -19.00.
At same time – Import Prices m/m. Data is foreseen at 0.3% from the previous 0.4%.
At 6.45pm – Industrial Production m/m. Data is foreseen at 0.1% from the previous 1%.
At 7.30pm- Prelim UoM Consumer Sentiment. Data is foreseen at 69.0 from previous 69.5.
At same time – Prelim UoM Consumer Sentiment. Previous was at 3.5%.
All above data could have a neutral impact on the dollar.
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