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The EU is working on a final draft concerning the nuclear deal with Iran as Tehran asks for further flexibility on the part of the United States. Iran is expected to provide an answer by the end of the day. The EU wants to bring back Tehran’s nuclear deal amid energy shortages triggered by the Ukraine war. News on this issue will come early during the Asian session.
Crude oil prices were sharply down, recovering modestly ahead of the close. The barrel of WTI is traded at around $88.53 at the time of writing.
Economic Data
On Monday, the regional central bank said that its Empire State manufacturing survey’s general business conditions index fell sharply to a reading of -31.3 in August, down from July’s reading of 11.1. The data missed expectations as economists were looking for the index to fall to 5.1.
Manufacturing in the New York Region has fallen to its lowest level since 2019 when activity ground to a halt at the start of the COVID-19 pandemic. The report said that this was, “the second largest monthly decline in the index on record, and among the lowest levels in the survey’s history.”
Other Developments
News coming from China triggered spurred the dismal mood. Retail Sales in the country were up 2.7% YoY in July, while Industrial Production rose by 3.8% in the same period, both missing the market’s expectations. At the same time, the central bank unexpectedly cut a key policy interest rate and drained liquidity. Additionally, China has announced more drills around Taiwan after a new delegation of US lawmakers met with Taiwanese President Tsai Ing-wen.
Recession-related concerns took over financial markets at the beginning of the week, pushing the safe-haven dollar higher across the FX board. The greenback pared gains during US trading hours as Wall Street managed to post modest advances but held near its intraday highs.
The EUR/USD pair trades at around 1.0160, while GBP/USD hovers around 1.2050. Commodity-linked currencies are down, with AUD/USD trading at 0.7020 and USD/CAD at around 1.2910.
Gold was among the weakest USD’s safe-haven rivals, down to $1,779 a troy ounce. The USD/CHF pair is at 0.6460, while USD/JPY trades at around 133.20.
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