In today’s briefing:
- [Rubber, China, Futures] Typhoon Triggered Defaults Nudged Rubber Spot Prices and SHFE Futures Up
- Week at a Glance: Markets Have Truly Thrown Inflation in the Bin by Now
- China Equities: More of the Same
- [IO Technicals Weekly 2024/36] Iron Ore Futures Face Bearish Pressure but Encounters Support
- CX Daily: Chinese Solar Giants’ Shine Fades Amid Growing Product Glut
- UK: Unemployment Lower Than Last Year
[Rubber, China, Futures] Typhoon Triggered Defaults Nudged Rubber Spot Prices and SHFE Futures Up
- Physical rubber prices gained strength during the Asian trade day as a typhoon in Vietnam disrupted the supply chain, limiting supply in the market.
- In addition, increased inquiries from the Chinese tire makers for the prompt cargoes resulted in further support for the prices.
- Chinese state buying up to 100kt of rubber, prices to be announced on 13 Sep 2024. This would provide some short term support on the SHFE
Week at a Glance: Markets Have Truly Thrown Inflation in the Bin by Now
- Good afternoon from a rainy Copenhagen.
- As always, Monday’s morning report will be replaced by our ‘Week at a Glance’ editorial, where we will go through the upcoming events of the week in a short and concise fashion.
- The mood across assets has surely improved over the weekend after Waller’s statements on Friday, which did not give the markets any clues on whether a 50 or 25bps cut was more likely in September after yet another weak NFP report.
China Equities: More of the Same
- We are strategically underweight China Equities in global and EM equity baskets, due to the structural slowing of growth and low EPS prospects.
- Event risk around the U.S. presidential election will also start to be considered.
- Further targeted policies from China authorities could cause intermittent trading driven short-covering, but aggressive game changing policy would be required to sustain a rally.
[IO Technicals Weekly 2024/36] Iron Ore Futures Face Bearish Pressure but Encounters Support
- Iron ore prices declined 9.4% last week, closing below the monthly S1 pivot point, indicating resistance.
- Despite a brief 0.75% rise on Friday, prices signaled a bearish crossover in the 9D and 21D SMAs, reinforcing negative sentiment.
- The 91-price level remains strong support, with key resistance levels at 93.9, 95.7, and 98.9. A sharp reversal could push prices to 96.5 or higher.
CX Daily: Chinese Solar Giants’ Shine Fades Amid Growing Product Glut
- Solar / Cover Story: Chinese solar giants’ shine fades amid growing product glut
- Typhoon /: Super Typhoon Yagi kills four, injures nearly 100 in China
- China-Indonesia /: Indonesia aims to woo Chinese investment in solar, EV battery production
UK: Unemployment Lower Than Last Year
- Unemployment extended its decline in July to reach 4.14%, 0.2pp less than a year earlier, despite a 0.1pp rise in the long-term rate, amid resurgent employment.
- Redundancies have fallen towards historic lows while vacancies are relatively stable, suggesting there isn’t labour hoarding to clear before new worker rights arrive.
- Slowing wage growth can reassure the BoE into cutting again in November, but a lack of labour market slackening could still necessitate a policy reversal in 2025.
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