Chinese Economic Indicators Kickstart Busy Trading Week
17 July 2023
In today's trading week kickoff, we have an unusually busy Monday. Chinese economic indicators have dominated the start of the week, with GDP figures coming in at 6.3%, lower than the anticipated 7.1%. Industrial production, however, offered a pleasant surprise, recording a rise of 4.4% against the expected 2.5%. On the downside, retail sales dipped more than expected to 3.1%, with forecasts initially set at 3.4%.
Adding to today's activity, the Empire State Manufacturing Index from the U.S. is projected to decline to -3.5. The price action over the past week brought notable movements, marked by a significant weakness of the USD and a rally in stocks and JPY. Even though Friday saw a correction with falling stocks and a bullish USD, the overarching sentiments from the week appear to linger.
Indices point to a potential upswing, with the Dow Jones approaching a key resistance level of 34600 points, the NASDAQ nearing local highs, the CAC inching towards mid-term highs, and the DAX closing on long-term highs.
The Forex market commenced the day with a strengthening JPY, exemplified by the CADJPY making new monthly lows. The USD has experienced a rather flat correction, sparking concerns that its recent weakening may continue.
Turning to commodities, which had a fantastic run last week primarily due to the weaker dollar, gold now signals a buy, contingent on the price remaining above $1900 per barrel. Silver is also a buy, provided it stays above $24.4 per ounce. The oil market, however, experienced a substantial correction on Friday, followed by a minor reversal today, suggesting that the situation for oil may deteriorate this week.