The better than expected ISM let yields rise further – sending the 10 year to 4.30. This in turn sent stocks lower and the USD stronger. US Indexes lost between 0.6 and 1%, Nvidia and Apple were significant detractors. Both last more than 3%. Reports that China had banned officials at central government agencies from using iPhones and other foreign-branded devices at and for work weighed.
The USD Index trades at 1.0480 with EURUSD 1.0720, Cable 1.2505 and USDJPY 147.45. Gold and Silver reman under pressure at 1919 and 23.08. Yen is near intervention level – be careful.
The Polish Central Bank took markets by surprise as it lowered rates despite high inflation, letting the Zloty lose almost 2%.The Canadian Central Bank kept rates unchanged in line with expectation.
Oil fell slightly over night but is 10% off the August lows.
Over night, Chinese Trade data came less bad than feared at “only” -8.8% for exports vs -9.2% expected and imports at -7.3% vs -9% expected, German industrial output fell more than feared and UK House prices also fell more than expected.
Up Next are the Swiss FX reserves, the EU GDP and US Initial Jobless Claims as well as Fed speakers in the US.
Bad economic data paired with high inflation seems to confirm our strats outlook for Q3 – Stagflation