Here is what you need to know on Monday, August 16:
Markets kick off the week with concerns of weaker global growth following disappointing Chinese data, a plunge in US consumer confidence and covid worries. The Taliban's victory in Afghanistan is also weighing on sentiment. Gold retreats after its comeback while cryptos are advancing.
Risk-off: Markets are in a damp mood, with stocks on the back foot and the safe-haven dollar on the rise. China reported an increase of 6.4% in industrial output in July and a rise of 8.5% in retail sales, both worse than expected. Investors are still digesting the collapse in the University of Michigan's preliminary Consumer Sentiment Index to 71 points, below the worst of the pandemic.
Federal Reserve officials are split about tapering the bank's bond-buying scheme, with some calling for immediate action and others casting doubt about the recovery. Fed Chair Jerome Powell is set to speak on Tuesday.
Infrastructure: The US Congress is set to debate and advance two spending bills – a smaller, bipartisan infrastrcuture spending one, and a larger one, backed only by Democrats.
The Taliban have taken over Kabul, cementing their victory in Afghanistan. While these developments have no instant economic impact, the rapid takeover and concerns about future instatbility in the region also weigh on sentiment.
COVID-19 cases continue rising in many regions, prompting harsher lockdowns in Australia and Japan. The safe-haven yen is on the rise, shrugging off Japan's better-than-expected Gross Domestic Product increase of 0.3% in the second quarter. Infections also continue rising in the US and China.
EUR/USD has retreated from 1.18 amid the worsening mood and as an opinion poll from Germany shows that the ruling CDU/CSU bloc is losing ground ahead of September's elections.
GBP/USD is hovering around 1.3850 as UK covid cases ceased to drop. Britain is loosening its self-isolation rules.
Gold is trading around $1,770, off the highs it reached on Friday but well about the depths of its flash crash.The precious metal's correlation with US Treasury yields seems to have loosened.
See Gold Weekly Forecast: XAU/USD looks to extend rebound ahead of FOMC Minutes
Cryptocurrencies: Bitcoin is consolidaitng its grains, hovering above $47,000 an Ethereum is trading around $3,200. Other digital assets also provide interesting setups:
See Cryptocurrencies Price Prediction: Shiba Inu, Polkadot & SafeMoon — Asian Wrap 16 Aug
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