Archives of “August 2020” month

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Eurozone August flash services PMI 50.1 vs 54.5 expected

  
  Analysis

Markit – August 20 2020

Markit - August 20 2020 
  • Prior 54.7
  • Manufacturing PMI 51.7 vs 52.9 expected
  • Prior 51.8
  • Composite PMI 51.6 vs 54.9 expected
  • Prior 54.9
The earlier release from Germany and France pointed to a slow down in the PMI data and the European data is below expectations across the board. EURUSD down a few ticks towards session lows. This does not bode well for Friday in terms of risk, UK PMI’s to come in 30 minutes.
This is a pivotal point for the eruozone and the slowing recovery picture will be eyed carefully by the ECB.

Copper prices have reasons for being supported

  
  Analysis

Copper hits two year high this week

Copper prices have been rallying recently on the weaker dollar (it makes it cheaper for holders of other currencies to buy), supply issues and rising demand from China on Beijing’s stimulus package. Take a look at this chart from Reuters tracking China’s PMI’s with the LME index:
Copper hits two year high this week 
Copper futures look attractive from a return to the level marked as long as we don’t see USD strength over the next week or so. The Jackson Hole Symposium on Thursday will be key next week as the market looks for fresh guidance on US monetary policy
Copper

A heads up for a US hurricane forecast – Houston, Galveston – early next week

  
  Analysis

Via the US National Hurricane Center

  • A tropical storm headed towards the western Gulf by the end of the weekend
  • It is expected to approach the TX/LA coastline by the middle of next week
Via the US National Hurricane Center
If the news develops unfavourably over the weekend there may well be oil market impacts at the Monday open. Hopefully it does not develop unfavourably. Nevertheless, a heads up.

Top US FDA official vowed to resign if Trump administration approves an unproven Covid-19 vaccine

  
  Analysis

Reuters with the report

  • Official Peter Marks says “would feel obligated” to resign if politics influenced outcome of vaccine approval process 
  • Vaccine clinical trials were enrolling volunteers “reasonably well,” and “possible” data could be available by October 

Link to the Reuters report is here for more (quite a lot more)

Chinese officials are clamping down on speculative stock and metal trading – fearful of backlash if prices drop

  
  Analysis
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The Nikkei has the piece on Chinese officials seeking to calm investor fervour:

  • on fears that investor anger in the wake of any financial collapse would stoke discontent with the government
  • Industrial and Commercial Bank of China, a major state-owned lender, notified customers at the end of July that it would cease setting up new accounts for financial products linked to platinum and palladium prices
  • Other banks have taken similar action
  • “This is what the authorities wanted,” said a sales manager at a large bank
Meanwhile, on the other side of the world …
The Nikkei has the piece on Chinese officials seeking to calm investor fervour:

India, Japan and Australia have begun discussions on reducing reliance on China

  
  Analysis
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An ICYMI from this week on the three countries set to discuss a trilateral Supply Chain Resilience Initiative (SCRI) to reduce dependency on China

  • No date has yet been set for initial negotiations but could come as soon as next week
  • initiative first proposed by Japan
  •  Japan is said to be in favour of launching SCRI by November
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