Commodities Fall as China Bears Strike Back

Sometimes no news is bad news. Sentiment toward China and related markets had improved dramatically over the last couple of weeks on anticipation of new stimulus for its struggling economy. That came to an abrupt end after comments by Chinese economic officials had no new commentary or details on stimulus. This news sent the Hang Seng to a 9.4% loss on the day, swiftly giving back a big chunk of its recent gains.

The sudden correction in sentiment toward China has also negatively impacted commodity prices today, particularly Copper which is down 2.1% and US Crude Oil, which is down 2.0%.

On the other hand, sentiment toward the US economy remains optimistic, pushing the US 10-year treasury note yield up above 4.00% and boosting the US Dollar which is up 0.2% against the Loonie and Euro, 0.4% against the Aussie, and 1.1% against Bitcoin. Gold is up 0.2% amid ongoing political and economic volatility.

US index futures are bouncing back this morning, up 0.1% to 0.4% this morning as they claw back some of yesterday’s 1.0% losses for US indices. TSX futures are down 0.15% due to its higher exposure to resource stocks. European markets are falling this morning with the FTSE down 1.1% and the Dax down 0.5%.

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