Over 200 leaders will be in NYC this week for the General Assembly meetings. Traders will be watching for any comments regarding the world economy, trade wars, global warming and other topics. US President Donald Trump is scheduled to address the General Assembly tomorrow. Equity markets are reacting negatively to “shortened” Chinese trade delegation visit.
EUR under pressure as German Flash Manufacturing PMI came in at 41.1. The market expectation had been 44.0, after 43.5 the previous month. This was the lowest level reported in over a decade. Services PMI came in at a nine-month low at 52.5. The market expectation for this number was 54.3, after last month’s 52.5. Lastly, the IHS Market Flash German Composite Index came in at a 7 year low of 49.1 in September, after an August number of 51.1 and an expected number of 51.4. These numbers are the lowest since October 2012, and places the economy in contraction territory. The reasons being given for these poor performance numbers include the trade war, the outlook for the car industry, as well as the uncertainty of Brexit.
Safe haven demand has seen selling pressure on the USD/JPY return. Escalating tensions in the Middle East, and fading optimism over the US-China trade continue to fuel fears of a global economic slowdown, which benefits safe haven currencies. These concerns are expected to continue for the near term.
Canadian Dollar failed to benefit from the bullish sentiment on oil prices as weak retail sales data took its toll on the Loonie. Oil prices remain firm and the Canadian should see some positive action over the next few days as Middle East tensions will remain front and center.
Asian stocks traded lower on Monday as concern over US-China trade tension weighed on sentiments. The deputy-level meeting in Washington “appeared” to be fruitful based on statements from both sides. The US Trade Representative Office said the talks were “productive” and a principal-level meeting would be held next month as planned. China’s Ministry of Commerce also said the meetings were “constructive” with good discussion on “detailed arrangements” for the high-level talks in October. Concern arose after the Chinese officials cut short their trip to visit farms in Montana and Nebraska.