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16th-august-2022-markets-review

16th August 2022: Yesterday closed orders given +3.051%; China’s economic growth is declining; Stocks rise, oil falls; Import of liquefied gas to Germany

Yesterday closed orders given +3.051%

Symbol: AUDUSD; Type: SELL; Open Price: 0.70801; Close Price: 0.70364; Profit: +0.617%.
Symbol: EURUSD; Type: SELL; Open Price: 1.03164; Close Price: 1.02092; Profit: +1.039%.
Symbol: NZDUSD; Type: SELL; Open Price: 0.64068; Close Price: 0.63744; Profit: +0.506%.
Symbol: USOIL; Type: SELL; Open Price: 93.566; Close Price: 89.513; Profit: +4.332%.
Symbol: ETHUSD; Type: SELL; Open Price: 1816.81; Close Price: 1888.95; Profit: -3.819%.
Symbol: USDCAD; Type: BUY; Open Price: 1.27776; Close Price: 1.28258; Profit: +0.376%.

China’s economic growth is declining

As a result of a deteriorating property downturn and ongoing coronavirus lockdowns, China’s economic decline accelerated in July. An unexpected decrease in interest rates is unlikely to turn things around. July saw a slowdown in retail sales, industrial output, and investment, which fell short of experts’ expectations. A poll found that the unemployment rate for young people aged 16 to 24 had reached a record high of 19.9%, creating a headache for the Communist Party just before a crucial convention. The government of China has stated that there would be no large-scale economic stimulus and has promised to maintain its strict Covid Zero policy. The GDP forecast for the remainder of the year, which experts are lowering even further below 4%, is becoming less optimistic.

Both industrial output and retail sales growth slowed in July, with the former coming in at 2.7% and the latter coming in at 3.8% from a year ago. During the first seven months of this year, investment in fixed assets increased at a rate of 5.7%, which is lower than the 6.2% increase that experts had anticipated. During a crucial conference in July, China’s top leaders provided a pessimistic assessment of the country’s economic development but did not unveil any new plans to stimulate the economy. The country’s leadership has admitted in private discussions that the yearly growth objective of about 5.5% is not feasible. The government has refrained from providing a large-scale bailout for real estate developers and has used combative rhetoric to warn against speculating in the sector on many occasions.

July was a particularly rough month for the housing market, with sales down by more than 28 percent annually and prices decreasing for an 11th consecutive month. Because local governments in China have already issued most of the bonds intended to be used for infrastructure expenditure, some analysts are predicting that there will be a “policy cliff” before the end of the year if there is no announcement of more borrowing. According to a report published by experts at UBS AG, the road to economic recovery in the second half will be rocky and fraught with uncertainty.

Stocks rise, oil falls

Even though the Federal Reserve is continuing toward monetary tightening, investors became concerned about indicators of a dramatic economic slowdown, which led to a decline in US stock-index futures and a rise in the dollar value. The value of the greenback ultimately increased after seeing different results, including gains and losses. The price of crude oil fell due to economic headwinds that made it difficult to forecast future demand and the likelihood of an increase in supply. The Stoxx 600 share index in Europe has increased for a fifth consecutive trading day, marking its longest winning streak since March. Commodity producers and utilities have been among the companies registering some of the most significant increases. Tencent Holdings Ltd. intends to sell all or most of its 24 billion dollar interest in the food-delivery company Meituan. This move is being made in part to satisfy regulatory authorities.

Import of liquefied gas to Germany

An agreement was reached between energy corporations and the German government to import liquefied natural gas through two new ports. After Russia reduced flows via a critical pipeline at the end of spring, Germany will need the infrastructure to boost the amount of petroleum it imports. LNG that was supplied from all over the world could assist Europe in lessening its dependence on Moscow and filling up storage sites in preparation for the following winter.

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