Noor Capital | Interview with Muhammad Hashad on Dubai TV – July 17, 2023

Muhammad Hashad, Director of Research and Development at Noor Capital and member of the US Association of Technical Analysts, commented, in an interview on Dubai TV, on the latest Chinese economic data issued earlier this morning, Monday July 17, and how this data has affected markets and trading as well as the performance of assets traded on this day.

Hashad pointed out that one of the most important data issued at the beginning of the new trading week is that data revealing how the Chinese Gross Domestic Product during the second quarter of this year recorded 6.3, which is less than market expectations at 7.1, but the latest reading may still be better than the first quarter reading for the same year that recorded was 5.4.

He continued: “Despite this retreat, we note that industrial production witnessed a growth of 4.4 percent, and there is a clear rise in retail sales during the past month. I believe that the Chinese economy and the steps that the central bank in China is taking now would support and improve the efficiency of the Chinese economy, but we can say the economic situation in general is still complex and the Chinese side should solve the problem of the real estate sector because it represents a very big burden on the economy, and if China can solve this problem, I think it will be able to reach its growth targets during the current year”.

Commenting on the return of operation and production from Libyan oil sites, which along with Chinese data, was one of the main reasons that led to the decline in oil prices today, Hashad indicated that oil prices were affected, perhaps by profit-taking transactions, after oil was seen at $77.30 a barrel. He also mentioned that Chinese data is undoubtedly the main factor that pressured prices, given that China is the largest energy consumer in the world and the return of some fields in Libya to operation, but the markets, especially the oil markets, are now focusing more on the amount of supply.

Hashad added that expectations indicate that the decline in oil supplies may begin in the second half of this year, especially with the voluntary output cuts by the Kingdom of Saudi Arabia and Russia. “I believe that what supports prices during the coming period is the possibility that the Fed will cut interest rates after the recent inflation data in the United States, and I believe that this could support oil prices”, he said.

Regarding gold price expectations, and where it is heading, Hashad said that gold’s decline to the $1963 level reflects how the precious metal reacts to the Chinese data, given that China is the largest importer and largest consumer of gold in the world, in addition to the slight rise in the dollar and the rise in Treasury bond yields, adding: “I think with once the precious metal can maintain the USD 1945 per ounce, we may see an ounce of gold around 1977 and even 1980 dollars, unless we witness any trading below the USD 1945 level.

Hashad touched on the expected profits of major companies in this important week, and also touched on a number of important events that the markets are awaiting under the umbrella of the US economy, most notably: US retail sales data as well as retail sales data from Canada, then Canada’s inflation data, and most importantly, inflation data from the United Kingdom.

Regarding the European markets, and whether they were directly affected by the economic growth data in China, Hashad believes that the recent Chinese data, of course, affected the European markets negatively because the economic relationship between the European side and the Chinese side is a very strong.

The Eurozone is also attentively watching the possibility of raising interest rates during the current year only once after the decline in US inflation, which had a clear negative impact on all sectors in the European market, especially the banking sector and financial companies.