Precious Metals Surge on Hong Kong Protests
Gold and silver prices surged higher on Tuesday, as Hong Kong protestors swarmed the airport, driving the closure of Departing Flights. Initially this put downward pressure on riskier assets but they seemed to have bounced back after dropping in Monday. Implied volatility remains elevated as investors are unsure how the mainland will eventually react to the protestors in Hong Kong. ZEW readings in Europe came in weaker than expected while jobs data in the UK came out stronger than expected.
European Sentiment Data Drops
European ZEW sentiment data was reported on Tuesday which disappointed investors. In Germany, current situation tumbled to -13.5 versus expectations that it would move to -6.3, while expectations fell to -44.1 vs. -28.0 expected. Eurozone expectations sank to -43.6 from -20.3 in July. These readings suggest the economy continues to weaken in Q3. The ECB is now set to ease rates which would could weigh on the Euro.
UK jobs data came out stronger than expected. Employment rose 115k in June versus expectations that it would rise by 60k. Weekly earnings accelerated to 3.7%. Unemployment ticked up to 3.9%, however, as more people started seeking work.
Japan Machine Tools Orders Narrowed, Chinese Monitory the Yuan
Japan July machine tool orders narrowed to -33.0% year over year from -37.1% in June. Chinese officials continue to moderate the pace of the yuan's decline. The dollar fix was set at 7.0326. China was accused by the US as a currency manipulator, and the continued weakness in the yuan could drive President Trump to further increase tariffs generating more market volatility.
The materials contained on this document are not made by Vestle but by an independent third party and should not in any way be construed, either explicitly or implicitly, directly or indirectly, as investment advice, recommendation or suggestion of an investment strategy with respect to a financial instrument, in any manner whatsoever. Any indication of past performance or simulated past performance included in this document is not a reliable indicator of future results.
For the full disclaimer click here.