We May Be Facing a Textbook Emerging-Market Crisis – GOLD & JPY GOES TO ACTION AS A SAFE HAVEN.
Emerging-market stresses have been building since at least 2013. Investors may have forgotten the effect of the “taper tantrum” on the so-called Fragile Five – Brazil, India, Indonesia, Turkey and South Africa – a term coined by Morgan Stanley to describe their vulnerability to capital outflows. Monetary accommodation, lower current-account deficits and growth disguised the underlying challenges, attracting more capital to those markets. The textbook recipe for an emerging-market crisis requires a large dose of debt and an associated domestic credit bubble, including misallocation of capital into uneconomic trophy projects or financial speculation. Then add: a weak banking sector, budget deficits, current-account gaps, substantial short-term foreign-currency debt and inadequate forex reserves. Season with narrowly based industrial structures, reliance on commodity exports, institutional weaknesses, corruption and poor political and economic leadership. Read More @ https://www.bloombergquint.com/global-economics/2018/09/03/we-may-be-facing-a-textbook-emerging-market-crisis#gs.EVJIIwE
Oil prices higher as U.S. sanctions limit Iran exports
Oil prices rose on Monday, supported by concerns that falling Iranian output will tighten markets once U.S. sanctions bite from November, but gains were limited by higher supply from OPEC and the United States. Brent crude oil LCOc1 was up 45 cents at $78.09 a barrel by 0905 GMT. U.S. crude CLc1 was 15 cents higher at $69.95. The two benchmarks have risen strongly over the last two weeks with Brent gaining more than 10 percent on expectations that global supply will tighten later this year. U.S. sanctions are already curbing exports from Iran. Read More @ https://www.reuters.com/article/us-global-oil/oil-prices-higher-as-u-s-sanctions-limit-iran-exports-idUSKCN1LJ029?feedType=RSS&feedName=businessNews&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+reuters%2FbusinessNews+%28Business+News%29
The trade war is deepening the gloom at Chinese factories – Chinese factories are losing export orders and laying off workers as the trade war with the United States exacerbates an economic slowdown that started earlier this year.
Growth in output from China’s huge manufacturing sector slumped last month to its lowest level in more than a year, according to the results of a survey of hundreds of companies published Monday. The latest purchasing managers index survey, conducted by media group Caixin and research firm Markit, fell to 50.6 in August from 50.8 in July. Any reading above 50 indicates growth, but August showed the slowest rate of acceleration in 14 months. China is one of the world’s fastest growing major economies, but it has begun to slow down this year, and signs of further weakness are spreading. “China’s economy is now facing relatively obvious downward pressure,” Zhengsheng Zhong, a senior analyst at research firm CEBM Group, said in comments accompanying the release of the survey Monday. Read More @ https://money.cnn.com/2018/09/03/news/economy/china-manufacturing-pmi/index.html?section=money_markets&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+rss%2Fmoney_markets+%28CNNMoney%3A+Markets%29
WHAT IS THE USD CHART SAYING?
TUESDAY NEWS THAT MIGHT AFFECT YOUR TECHNICAL TRADES
- 9.30am – Australia will release their Current Account – little or no impact.
- 1230pm – AUD goes to action with RBA releasing RATE – expect good volatility in favor for AUD.
- 4.30pm – UK will release Construction PMO – expect volatility for GBP pairs.
- 5.30pm – RBA governor speaks – expect volatility for AUD.
- 8.15pm – GBP volatility expected when the inflation hearing is released.
- 9.30pm – Canada will release their Manufacturing PMI – we buy CAD.
- 9.45pm – 10.00pm – Final Manufacturing, ISM Manufacturing PMI and ISM manufacturing Prices – we are expecting little or no movement.
We are expecting the market to consolidate till Friday when the NFP is released. Be cautious and always have money management in place.
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