Will the Fed ever move if we can’t trust data coming out of China?
Batsford outlined that sentiment in China’s factories dipped to 47.0down from 47.3 in August and thus the lowest value since March 2009. He continued and commented that this is the 7th consecutive decline where levels under 50.0 denote a contracting sector. This led Ingram to note the supposed growth rate of China as 7%, which he believed should be more like 4%. He added that the Fed highlighted one of the main reasons for it holding rates at historically low levels was China, therefore he concluded that if data being released from China continues to be false, when will the Fed really know when the China situation has cleared up, and so when will they raise rates?
Panic on the FTSE 100 if it breaks August lows
Mir commented that the Black Monday lows are the line in the sand for the FTSE 100, and if these lows are broken, we could be in trouble. He also added that the FTSE went down to the 5875 area, which moves the FTSE into the selling zone.
US dollar at risk, Upside breakout in Gold/EUR
Batsford noted FX Street, and outlined that the China Manufacturing PMI is at a 6 ½ year low in September, which could lower the chances of a Fed interest rate hike further.
He continued that the USD is at risk, meanwhile the Sterling/Commodity dollars (AUD, NZD, and CAD) appear to be attractive today.
Finally, he highlighted the ECB and Draghi, who could stress readiness to do more, and thus a upside breakout in Gold/EUR possible.
Deutsche Bank (XETRA:DBKGn) cut weighting on VW stock to hold
Batsford noted the 5 billion Euro fine and reputational damage done to VW, however, with 21 billion Euros in hand and an extra 3 billion from the asset sale of Suzuki. VW may be able to weather the storm and maintain its high rating, but it has cut its 15-17 earnings by 35%.
Watch the video to see more on Gold, Glencore (LONDON:GLEN), Sainsbury’s, the DAX, the Dow and HSBC.