Monday Starts With a Very Strong USD

This Monday should be rather quiet on the European Market because a few countries have a day off from trading. Not in Asia though, where we’ve already kicked off with GDP data from Japan and retail sales from China. Both came in worse than expected. China’s retail sales disappointed quite significantly with the print of 2.7% vs 5% expected.

That’s all the tier-1 data there is today but between Monday and Tuesday nights we’ll be finding out what the meeting minutes from RBA are, which could definitely induce some volatility there.

Indices started Monday with a small correction, which is quite understandable considering the excellent session on Friday.

Elsewhere commodities are crashing with oil dropping 4% and gold going down 1.5%. This has a lot to do with a stronger dollar. Oil is heading towards new long-term lows, by a few more cents and WTI will be on its lowest levels since January. Brent oil on the other hand, just made fresh lows for August flirting with pre-invasion prices.

The Forex market started out with a significant risk off mode. The USD is gaining a lot, with EURUSD dropping to levels seen before last Wednesday’s influential CPI print. The same happens on GBPUSD, which actually welcomes a proper sell signal as the price breaks the mid-term up trendline. The way towards lows from July has opened. The yen has also strengthened quite significantly, which actually may be a start of a new bearish wave (but of course not on the USDJPY).