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China retail sales, industrial output, investment data for August 2024 – another round of disappointing results.

Retail Sales +2.1% (YoY) (Aug)

• expected 2.5%, prior 2.7%

Industrial Production +4.5% (YoY) (Aug)

• expected 4.8%, prior 5.1%

Fixed Asset Investment +3.4$(YTD) (YoY) (Aug)

• expected 3.5%, prior 3.6%

Unemployment 5.3%

• expected 5.2%, prior 5.2%

Also published were home prices data, which fell at their sharpest rate in 9 years, at -5.3% y/y in August, compared with the previous month’s -4.9%.

• For the m/m, down 0.7% (July was also -0.7% m/m)

China’s property sector continues to be a black hole for the economy.

Piecemeal stimulus looks set to continue:

• Reports that China set to cut interest rates on more than $5 trln of outstanding mortgages

China has a growth target of ‘around 5%’ this year. China invariably hits its growth target, officially anyway.

—

China’s National Bureau of Statistics (NBS) painted an upbeat picture.

• In August, under the strong leadership of the Central Committee of the Communist Party of China (CPC) with Comrade Xi Jinping at its core, all regions and departments strictly implemented the decisions and arrangements made by the CPC Central Committee and the State Council. All regions and departments adhered to the general principle of pursuing progress while ensuring stability, fully and faithfully applied the new development philosophy on all fronts, strengthened macro-regulation and strove to promote high-quality development. As a result, the production and demands sustained a recovery, employment and prices were basically stable, and high-quality development continued to move ahead. The national economy maintained stability in general while making steady progress.

These are the main headings from the statement:

1. Industrial Production Increased Steadily with Fast Growth in Equipment Manufacturing and High-Tech Manufacturing.

2. Service Sector Continued to Recover and Modern Services Developed Well.

3. Market Sales Kept Increasing and Online Retail Sales Grew Rapidly.

4. Investment in Fixed Assets Scaled up and Investment in High-Tech Industries Grew Fast.

5. Imports and Exports of Goods Grew Fast and Trade Structure Continued to Optimize.

6. Employment Was Generally Stable and Urban Surveyed Unemployment Rate Increased Slightly.

7. Increase of Consumer Price Expanded and Producer Prices for Industrial Products Declined.

This article was written by Eamonn Sheridan at www.forexlive.com.

NASDAQ and S&P indices end the week with five straight days of gains

• Goldman Sachs sees a 25 basis point cut from the Fed next week
• Next week will be dominated by the FOMC rate decision.
• Crude oil futures settled at $68.65
• ECB’s Makhlouf: ECB is not pre-committing to a particular rate path.
• Go big or go small? JP Morgan reiterates its call for 50 basis point cut next week.
• CNBC’s retail monitor sees consumer spending cooling
• Baker Hughes rig count for the current week
• Fitch: If this is an extended strike you could see Boeing downgraded
• That’s a wrap for the European stock markets.
• Paulson on CNBC: He favors a 50 basis point cut by the Fed
• University of Michigan preliminary sentiment for September 69.0 versus 68.5 estimate
• A 50 basis point cut is now 50-50 for the Fed decision next week
• Kickstart the FX trading day for Sept 13 w/a technical look at the EURUSD, USDJPY & GBPUSD
• Canada capacity utilization Q2 79.1% vs 78.6% last quarter
• Canada July wholesale sales +0.4% versus -1.1% expected
• US August import prices -0.3% versus -0.2% estimate. Export prices -0.7% vs -0.1% estimate
• University of Michigan consumer sentiment Preliminary. Import-export prices in the US
• The JPY is the strongest and the AUD is the weakest as the NA session begins
• ForexLive European FX news wrap: Yen firms as yields stay heavy
• ECB’s Holzmann: There could be room for another rate cut in December

As the day and week comes to a close, the JPY is ending the day as the strongest of the major currencies and the NZD is the weakest. The US is ending the day mixed with most of the declines coming vs the JPY and the CHF and gains vs the AUD and NZD. The greenback was near unchanged vs the EUR, GBP, and CAD today.

The NZDUSD moved lower today after reaching new highs near the 100 bar MA on the 4-hour chart near 0.6195. The subsequent fall took the price back down to the 100-hour MA at 0.6151. The 100 hour MA will be a key barometer for the pair going into next weeks trading.

For the USDJPY, it traded to a low of 140.275 and in the process tested the December 2023 low at 140.248. The pair rebounded into the close to 140.90. WIth the low today within a few pips of the December 2023 low, traders may look at the area as a double bottom to lean against into the new trading week.

For the EURUSD , the high prices today, stalled at the swing area that was defined back in August between 1.1097 and 1.11042 (see red numbered circles). The move back down has the pair trading at 1.1072 near the close for the week. The 100 hour MA at 1.1059 will be a key support target early next week. The swing area up to 1.11042 will be the key resistance that needs to be broken to increase the bullish bias.

The GBPUSD buyers took the price above a swing area and the 100 bar MA on the 4-hour chart at 1.31399, but falled. The price is trading between that MA and the 200 hour MA below at 1.31104. Those MAs will be the close support and resistance into the new week. A move below the 200 hour MA will also have the 100 hour MA at 1.30844 to contend with as support. It would take a move below it to give the sellers more control.

Looking at the US yield curve, yields today moved lower with the yield curve steepening. The 2-10 spread is now 7.2 basis points which is the most positive since June 2022. The 2-30 year spread isi near +40 basis points,also the highest since June 2022.

A snapshot of the yields near the end of day shows:

• 2-year yield 3.5886%, -5.9 basis points
• 5 year yield 3.436%, -3.0 basis points
• 10-year yield 3.658%, -2.1 basis points
• 30-year yield 3.984%, -1.1 basis points

For the week:

• 2 year yield fell -5.4 basis points
• 5 year yield fell -3.2 basis points
• 10 year yield fell -2.0 basisi points
• 30 year yield fell -0.6 basis points.

US stocks staged a solid rebound after the tumble last week. The Nasdaq and the S&P were both up every day of the week with the S&P rising 4.02% for the week and the Nasdaq rising 5.95%. The S&P fell -4.25% last week and the Nasdaq was down -5.77%. So back to the very begining of the calendar month. Remember September is traditionally, a negative month.

Next week, the FOMC meets (25 or 50 bp cut). The BOE and the BOJ will also meet with both expected to keep rates unchanage.

US retail sales will also be released along with Australia jobs and Canada CPI data (see the calendar here)

Thank you for your support this week. Wishing all a happy and healthy weekend. I hope your team wins.

This article was written by Greg Michalowski at www.forexlive.com.

The major US stock indices closed the day with gains. The NASDAQ and the S&P had a perfect week with five straight winning days. The NASDAQ index erased it -5.77% decline from last week with a gain of 5.95%.

A snapshot of the closing levels today shows:

• Dow industrial average rose 297.01 points or 0.72% at 41393.78
• S&P index rose 30.26 points or 0.54% at 5626.02
• NASDAQ index rose 114.30 points or 0.65% at 17683.98

The Russell 2000 rose 53.06 points or 2.49% at 2182.49.

For the trading week:

• Dow rose 2.60% after falling 2.93% last week.
• S&P index rose 4.02% after falling -4.25% last week.
• NASDAQ index rose 5.95% after falling -5.77% last week
• Russell 2000 rose 4.355% after falling 5.69% last week.

Some big winners this week included:

• ARM holdings +25.88%
• Broadcom, +22.41%
• Chewy, +22.03%
• Super Micro Comuputer, is 18.29%
• Palantir, +17.21%
• Nvidia, +15.82%
• AMD, +13.37%
• First Solar, +9.64%
• Tesla, +9.28%
• United Airlines, +9.17%
• Amazon, +8.81%

Losers this week included:

• Raytheon, -17.7%
• GameStop, -13.67%
• Moderna, -6.52%
• Adobe, -4.71%
• J.P. Morgan -3.82%
• Southwest Airlines -3.40%
• Biogen -2.58%
• Citigroup -2.37%
• Wells Fargo -2.22%
• Occidental -1.88%
• General Mills -1.84%
• General Motors -1.76%

This article was written by Greg Michalowski at www.forexlive.com.

Monday, September 16 (ET)

• 8:30am ET: US Empire State Manufacturing Index (Forecast: -4.1, Previous: -4.70)

Tuesday, September 17 (ET)

• 5:00am ET: German ZEW Economic Sentiment (Forecast: 17.2, Previous: 19.2)

• 8:30am ET: CAD CPI m/m (Forecast: 0.1%, Previous: 0.4%)

• 8:30am ET: US Core Retail Sales m/m (Forecast: 0.2%, Previous: 0.4%)

• 8:30am ET: US Retail Sales m/m (Forecast: -0.2%, Prvious: 1.0%)

Wednesday, September 18 (ET)

• 2:00am ET: UK CPI y/y (Forecast: 2.2%, Previous: 2.2%)

• 8:30am ET: Building Permits (Forecast: 1.41M, Previous: 1.40M)

• 2:00pm ET: Federal Funds Rate (Forecast: 5.25%, Previous: 5.50%)

• 2:30pm ET: Fed Reserve Press conference

• 8:45 PM ET: NZ GDP QoQ: Forecast -0.4%. Previous +0.2%

• 9:30 PM ET: AUD Employment Change: Forecast 25.8K.Previous 58.2K. Unemployment rate: Forecast 4.2%. Previous 4.2%

Thursday, September 19 (ET)

• 7:00 AM ET: BOE interest rate decision: Forecast 5.00%. Previous 5.00%

• 8:30am ET: US Unemployment Claims (Forecast : 232K, Previous: 230K)

• 8:30am ET: US Philly Fed Manufacturing Index (Forecast : -0.6, Previous: -7.0)

• 10:00am ET: US Existing Home Sales (Forecast: 3.89M, Previous: 3.95M)

Friday, September 20 (ET)

• Tentative: BOJ Policy Rate (Forecast: <0.25%)

• 2:00am ET: BOJ Press Conference

• 8:15am ET: BOC Gov Macklem Speaks

• 8:30am ET: CAD Core Retail Sales m/m (Forecast: -0.5%. Previous 0.3%)

• 8:30am ET: Retail Sales m/m (Forecast: 0.3%. Previous -0.3%)

• 11:00am ET: ECB President Lagarde Speaks

• 2:00 PM ET: Fed’s Harker speaks

This article was written by Greg Michalowski at www.forexlive.com.

Crude oil futures is settling at $68.65. That is down $0.32 -0.46%.

The high price reached $70.32. The low price was at $68.50

THe selling into the settlement took the price below the 200 hour MA at $68.91.

This article was written by Greg Michalowski at www.forexlive.com.

To cut, or not to cut 50 basis points.

As the Federal Reserve’s September meeting approaches, JP Morgan reiterates its call for a 50 basis point cut, scheduled for Wednesday at 2 PM ET. Following Nick Timiraos’ article highlighting the Fed’s predicament, market odds have shifted from 20-80 to a nearly even 50-50 split.

Former Fed members Dudley and Mester have publicly weighed in, with Mester open to a 50 basis point cut and Dudley explicitly supporting it. While the Fed is in a blackout period, market observers wonder if “friends and old family members” might be sending subtle messages on behalf of the Fed Chair.

The spread between the Fed funds rate and inflation rate supports a cut, and the Fed is aware of the lag effect from policy changes. Recent CPI and PPI data were unsurprising, but analysts predict a core PCE increase of 0.13-0.17% for the month by piecing together the clues from each, indicating lower inflation.

Political developments will be closely watched, but pundits anticipate a split on Capitol Hill, which could contain potential changes.

The shift has helped the stock market this week. The Nasdaq is now up 6.14% this week which wiped out the -5.77% decline last week. The gain is the largest since October 2023 when the index rose 6.61%. The S&P this week is up 4.20% which nearly equates to the decline of -4.25% last week. THe gain this week is also on track for the best in 2024 (and best since October 2023).In the US debt market,

• The 2 year yield is down another -7.6 basis points this week after tumbling -27 basis points last week.
• The 10 year yield is down -6.8 basis points after falling -19.5 basis points last week.

This article was written by Greg Michalowski at www.forexlive.com.

The CNBC retail monitor sees consumer spending cooling, but still higher:

• Retail sales ex auto and gas MoM: +0.5% versus +0.7% last month.
• Retail Sales YoY ex auto and gas: +2.1% versus +0.9% last month
• Core Retail Sales MoM: 0.2% versus +1.0% last month
• Core Retail Sales YoY: on .9% versus 1.7% last month

Looking at the different components 7 were higher vs 10 last month:

Gains were led by:

• Clothing and accessories: +2.1%
• Food services and drinking places: +1.7%.
• Nonstore retailers: +1.5%

Losers were led by:

• Electronics and appliances: -0.9%
• Building and Garden Supplies: -1.3%
• Sporting-goods, hobby, music and bookstores: -2.9%

This article was written by Greg Michalowski at www.forexlive.com.

The Bakers Hughes rig count for the current week shows:

• Total rig up 8 at 590
• Oil rigs + 5 at 488
• NatGas rigs +3 and 97

This article was written by Greg Michalowski at www.forexlive.com.

Boeing machinists went on strike after rejecting a 25% pay raise.That is shuttered the going manufacturing plant

Here are the main points from the Boeing CFO’s statement

• Strike Impact: Strike will jeopardize recovery, impact production and deliveries

• Cash Conservation: Laser-like focus on actions to conserve cash

• Union Negotiations: Want to get back to the table and reach an agreement

• Production Goals: Getting to 38/month by end of year will take longer

• Inventory Levels: About 70 aircraft left in inventory at shadow factory

• Supply Chain Constraints: Broadly impacting the industry, affecting deliveries

• Specific Production Impacts:

• 787 deliveries below 5/month due to seat shortage

• Lower 777 deliveries due to engine supply issues

• Defense Unit: Q3 margins to be negative

Fitch is now out saying that if the strike is extended it could impact Boeings ratings (cut to junk status).

Shares are down -3.1% at $157.80. For the trading year, the stocks is down close to 40% on the year.

The consistently negative Boeing headlines takes the headline away from Intel. It’s shares are down nearly 61% on the year. The third worst performer of the Dow stocks is Nike down -27.6% in 2024

This article was written by Greg Michalowski at www.forexlive.com.

That’s a wrap for the European stock indices for the trading week, and then ended the day with gains, and the week with gains as well.

For the trading day:

• German DAX +0.92%
• France’s CAC, +0.41%.
• UK’s FTSE 100 +0.39%
• Spain’s Ibex, +1.23%
• Italy’s FTSE MIB +0.34%

For the trading week:

• German DAX +2.11%
• France’s CAC +1.54%
• UK’s FTSE 100 +1.12%
• Spain’s Ibex +3.29%
• Italy’s FTSE MIB +0.83%

Looking at European benchmark 10 year yields:

• Germany 2.149%, -5.3 basis points
• France 2.839%, -6.0 basis points
• UK 3.770%, -14.7 basis points
• Spain 2.943%, -8.8 basis points
• Italy 3.513%, -7.2 basis points

As London/European traders had for the exits, US stocks are higher in trading near highs for the day:

• Dow industrial average up 421 points or 1.02% at 41517.50
• S&P index up 37.40 points or 0.67% at 5633.10.
• NASDAQ index up 113.3 points or 0.65% at 17683.94

Russell 2000 up 49.21 points or 2.31% at 2178.64. . That is its largest gain since August 23.

Boeing shares are down -0.50% as machinists go on strike. J.P. Morgan is the other Dow 30 stock negative on the day (-0.60%). IBM, Caterpillar, and Intel lead the gainers with gains of around 2%.

Looking at the US debt market:

• 2-year yield 3.599%, -4.9 basis points
• 5-year yield 3.439%, -2.6 basis points
• 10 year yield 3.662%, -1.7 basis points
• 30 year yield 3.992%, -0.3 basis points

Gold is on pace for another record close. It’s price is up $22 or 0.87% at $2581. For the trading week gold is up 3.37% on a gain of $84

Silver is up $0.96 or 3.24% at $30.91. Silver is up 10.38% this week with a gain of $2.90

Crude oil is trading up $0.30 at $69.38. Crude oil is up 1.92% with a gain of $1.31.

This article was written by Greg Michalowski at www.forexlive.com.

John Paulsen made a killing by calling the 2008 housing market bubble. A supporter of GOP candidate Trump, he is on CNBC given an interview.

• He says it is a good time for investing
• We did have a bubble in government debt (negative interest rate times), but does not see it anymore
• He favors a 50 basis point cut from the Fed next week
• He thinks the tipping point from the national debt could put pressure on the financial markets (US yields).
• If we continue to run high deficits and increase taxes that would hurt the economy.
• We will see a crash if see 40% capital gains taxes, tax on unrealized gains, and if the Trump tax cuts expire under a Harris presidency.
• If Harris won, he would be more in cash and keep his investment in Gold (gold is at a record level)
• The major reason gold is rising as have less confidence in paper money.
• 10% in gold would be a prudent amount for investors.
• The markets depend on who is elected.
• Thinks stocks will go up, interest go do, earnings go up and have a robust economy if Trump elected President

This article was written by Greg Michalowski at www.forexlive.com.

• Prior month 67.9
• University of Michigan consumer sentiment 69.0 versus 68.5 estimate.Best since May 2024
• Current conditions 62.9 versus 61.5 estimate. Last month 61.3. Best since June 2024
• expectations and 73.0 versus 71.0 estimate. Last month 72.1. Best since April 2024
• 1-yesr inflation expectations 2.7% versus 2.8% last month.
• 5- year inflation expectations 3.1% versus 3.0% last month

The final release will be announced in a few weeks.

The inflation expectations for 1 year is back within the middle of the pre-Covid up-and-down range which for the most part was between 2.3% in 3.4%.

This article was written by Greg Michalowski at www.forexlive.com.