Quiet Start to the Week with US Markets Closed
It was a very quiet start to the trading week yesterday as traders took advantage of the Labor Day holiday in the US to take a bit of a breather ahead of key data and central bank action in the coming days. With a lack of momentum from the US holiday, Asian markets will look to key data in China for direction along with the latest rate update from the RBA. Currency markets as expected had a quiet day with the majors trading in very tight ranges and it was a similar story for commodities, Oil still trading near yearly highs, WTI just shy of $86/b and Gold dropping off slightly on the day, now just under the $1,940 level.
Oil to Continue Tracking Higher
Oil has experienced a strong move over the last couple of weeks as production cuts have helped lift the ‘Black Gold’ to levels not seen since last November. Supply reductions primarily led by Saudi Arabia and Russia have seen traders jump into the market and both Riyadh and Moscow are set to announce their planned next moves over the coming days with most investors expecting that the cuts will be extended. The industry is also hoping that demand from China will continue to remain firm and with the possibility of the twin factors of supply reducing and demand increasing creating a perfect storm, some traders are calling for Oil to move back to heady heights approaching $100/b again in the next few months.
Asian Markets in Focus Today
It was a somewhat lackluster day for global markets yesterday with the US enjoying a bank holiday and little on the event calendar to inspire more moves. However, the macroeconomic calendar kicks into action today and most of the focus will be on the APAC session. Early in the day, we have the Caixin PMI Services number out of China and investors will be once again looking for an improvement from the beleaguered economy to boost sentiment, anything above the expected 53.6 print should help. Later in the day, the latest rate update is due from the RBA, expectation is firmly in the ‘hold’ camp but the statement could see some moves in the market. The European session sees a raft of Services PMI data releases across the continent and there are Factory order numbers due out in the US, but investors are not expecting to see much reaction in the market from either.
