What Could Chinese Dull Economic Data Mean For Commodities?

Commodities traders are sitting on edge of their seats following the latest batch of Chinese economic data. Almost all commodity-related assets have been impacted. For example; oil prices plummeted by nearly 5% in early trading on Monday.

In commodities, WTI drifts 3.5% lower to trade around $88, but at the time of writing it trades at $89.05 per barrel. Earlier on Monday, spot gold falls to lose more than $20 to trade near $1,782 per ounce. At the time of writing the precious metal trades at $1778.82 Spot silver loses 2% near $20. Most base metals trade in the red territory; LME nickel falls 4.6%, underperforming peers.

US economic data slate, on Monday, includes August Empire manufacturing (8:30am), NAHB housing market index (10am) and June TIC flows (4pm); industrial production, retail sales and FOMC meeting minutes are ahead this week

The negative data from China is adding to recurrent fears of a global recession in 2022. US equity futures stocks were mixed and commodities from oil to iron ore tumbled as the latest round of terrible data from China further clouded the outlook for the global economy, an unexpected rate cut from the PBOC.

Contracts on both the S&P 500 and Nasdaq 100 were lower by about 0.5% follows gains last week that sent the tech-heavy index up 22% from June to the highest since April, suggesting a four-week stocks rally may stall at least until the $13Bn in daily buying from systematic funds and buybacks kicks in.

European equities benchmark advanced about 0.2%, as corporate news buoyed healthcare stocks while miners and carmakers declined. Asian stocks added less than 0.1% and emerging-market stocks dropped.

In premarket trading on Monday, tech giants including Apple Inc. and Amazon.com declined, alongside the broader tech sector as growth fears reemerged. US-listed Chinese electric-vehicle makers slid in premarket trading Monday after Li Auto forecast revenue for the third quarter that is below estimates.

Cisco Systems (CSCO US) traded 0.6% lower after Citi says the company is losing market share as supply chain issues hurt the network gear maker more than its peers. Lufax shares rose as much as 3.5% amid a report that the Chinese fintech firm is planning to file for a listing in Hong Kong as soon as the second half of the year.
PlayAGS (AGS US) shares gained 7.5% to $8.08 after the company said it got a non-binding indication of interest valued at $10 a share in cash. UNITY Biotechnology (UBX US) shares rose 15% after Citigroup analyst Yigal Nochomovitz (buy) said the data for UBX1325 in in patients with diabetic macular edema were better than expected.
Illinois Tool Works (ITW US) was downgraded to sell from hold at Deutsche Bank, which struggles to sees the equipment manufacturer’s valuation as justified.

The US dollar jumped as the Euro and yuan tumbled, crude oil plunged, the downside accelerating after Iran’s foreign minister said that a “basis exists for signing an agreement “in the very near future” to revive the 2015 nuclear deal. After hitting $25K, a bout of aggressive shorting and dollar strength sent bitcoin back to $24K.