The day kicked off with some positive trade data from China, where exports grew by 8.7% in August, significantly outperforming expectations. This surprising growth in exports offers some hope for global trade, but markets remain cautious despite the upbeat data. Beyond that, all eyes are on the UK's Claimant Count Change expected later today, with analysts forecasting a figure of 95.5k. Towards the end of the European session, the market will also be tuned in to Bank of Canada Governor Macklem speech, which could impact the Canadian dollar.
As for the markets right now, we are seeing a bearish start to the day. After a relatively positive Monday that served as a correction to Friday’s losses, Tuesday is bringing back the negative sentiment. By the end of the Asian session, indices were flashing red, and major benchmarks continue to trend lower across the 3, 5, and 10-day windows. The bearish tone could indicate further declines as European markets open.
On the currency front, the Swiss Franc and Japanese Yen showed some strength during the Asian session, though the moves were minor, suggesting that volatility is relatively low. Over the last few days, the Japanese Yen and US Dollar have consistently outperformed, while commodity-linked currencies like the Australian Dollar and New Zealand Dollar have been among the weakest. This trend seems to be holding today, with the Yen maintaining its position as the strongest currency.
In the commodities market, oil prices are sitting at key long-term support levels, with prices hovering around lows not seen since March, April, May, June, and December 2023. These levels could present a potential bounce opportunity for traders, though at the moment there doesn’t appear to be any significant bullish momentum forming. Meanwhile, metals like gold and silver are also trading lower today, signaling continued pressure on commodities.