Daily Market Analysis by FxGrow

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Daily Market Analysis – 23rd Sept, 2015
By FxGrow Research & Analysis Team

China manufacturing PMI falls to lowest in more than 6 years



Activity in China's manufacturing sector unexpectedly shrank to a 6½-year low in September, indicating a sharper slowdown in the world's second-largest economy that could spell more turmoil for financial markets.

The preliminary Markit China Manufacturing Purchasing Managers' Index (PMI) fell to 47.0 in September, the worst since March 2009 and below market expectations of 47.5 and August's final 47.3. Levels below 50 signify a contraction.

Global investors and policymakers are on edge over China after the U.S. central bank last week held off from raising interest rates, saying it was unsure if international problems and China's slowdown in particular, will hurt the U.S. recovery - Reuters.

"The weaker-than-expected PMI suggested domestic and external demand remained sluggish. It's almost certain China's economic growth will slide below 7 percent in the second half of this year" - Minsheng Securities.

"The principle reason for the weakening of manufacturing is tied to previous changes in factors related to external demand and prices" - Chief economist at Caixin Insight Group.

"Fiscal expenditures surged in August, pointing to stronger government efforts on the fiscal policy front. Patience may be needed for policies designed to promote stabilization to demonstrate their effectiveness" - Chief economist at Caixin Insight Group.

The Asian Development Bank has cut its estimate for China's growth to 6.8 percent for 2015. It expects the growth rate of the world's second largest economy will fall to 6.7 percent in 2016.

Mario Draghi, European Central Bank President, will speak on monetary policy before the European Parliament’s Economic and Monetary Committee providing insight into whether the central bank is contemplating expanding its bond buying and if so, when.

The Eurozone continues to experience extremely low levels of inflation and unemployment is very high.

The UK manufacturing sector growth stalled for the first time in more than two years, with a stronger Pound and weak exports weighing on the sector's margins and volumes.

The trade surplus in Switzerland contracted in August, as the strength of the Swiss Franc hit demand in the European Union and China.

Crude oil is trading higher at $46.80 as market survey points to fall of crude oil stocks.

Gold is trading lower in the Europe at 1127.06, while Silver is up at 14.79

23rd Sept 2015 – 09:00hrs GMT

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Note: This analysis is intended to provide general information and does not constitute the provision of INVESTMENT ADVICE. Investors should, before acting on this information, consider the appropriateness of this information having regard to their personal objectives, financial situation or needs. We recommend investors obtain investment advice specific to their situation before making any financial investment decision.

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Daily Market Analysis – 29th Sept, 2015
By FxGrow Research & Analysis Team

Stocks fall on weak Chinese data



In China Industrial profits dropped 8.8% last month, showing the world’s biggest consumer of commodities is struggling with excess capacity, sluggish investment and weaker manufacturing, according to data released by China’s National Bureau of Statistics.

Following the weak Chinese data Major Stock indexes ended in loss yesterday. The S&P 500 and NASDAQ finished modestly in the red and strong gains for Nike (NKE) keeping the Dow Jones in the black.

Euro climbed up against the US Dollar and is presently trading at 1.1277 in the European trading session today.

In China a combination of lower sales, higher costs and weak prices as a result of soft demand has been weighing on the manufacturing sector’s earnings power. The pressure is particularly notable in the mining sector, offsetting modest gains elsewhere. China and the Fed have been the market’s primary pre-occupations lately, and this report adds to those worries.

The Australian dollar has fallen after weak Chinese industrial data added to evidence that the Chinese economy is slowing down. AUDUSD is trading at 0.6949 in the European trading session.

European stocks also declined on Monday as more disappointing Chinese data and downbeat analyst comment weighed on the stocks.

London's benchmark FTSE 100 index ended the day down 2.46 per cent to 5,958.86 points compared with Friday's close. In the Eurozone, Frankfurt's DAX 30 finished 2.12 per cent lower at 9,483.55 points and the Paris CAC 40 plunged 2.76 per cent to 4,357.05.

"Both the Australian and Canadian dollars fell sharply today as profits fell by the largest amount in four years. Earnings in the resource sector have been hit particularly hard and this put additional pressure on commodity prices. There are major economic headwinds in China and this will limit growth in countries that rely on Chinese demand" - BK Asset Management.

In the US, New York Fed President William Dudley noted that the Fed is still on track to increase interest rates in this year. He, however, stressed that the decision would be depend on the health of US economy and financial conditions, as well as global economic development.

In an interview with Wall Street Journal, Dudley suggested that "if the economy continues on the same trajectory it’s on…and everything else suggests that’s likely to continue…then there is a pretty strong case for lifting off".

"I am starting to see signs of imbalances emerge in the form of high asset prices, especially in real estate, and that trips the alert system. Given the progress we've made and continue to make on our goals, I view the next appropriate step as gradually raising interest rates, most likely starting sometime later this year" - San Francisco Fed President John Williams.

Crude oil is trading lower at $44.43 ahead of the estimates of U.S. crude stockpiles report.

Gold is trading lower in the Europe at 1127.87, while Silver is weak at 14.54

29th Sept 2015 – 06:42hrs GMT

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Note: This analysis is intended to provide general information and does not constitute the provision of INVESTMENT ADVICE. Investors should, before acting on this information, consider the appropriateness of this information having regard to their personal objectives, financial situation or needs. We recommend investors obtain investment advice specific to their situation before making any financial investment decision.

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