Breaking News

China's manufacturing contracts sharply, dragging oil down

News Date: 1/2/2016 01:11:25
Update Date: 1/2/2016 01:17:31
 
Oil prices gave up ground on Monday after official data showed a sharp contraction in China's manufacturing sector, with the PMI at 49.4 for January, below 50, the line separating growth from shrinking, and the lowest level in more than three and a half years. A private survey was even more dismal, with the Caixin Manufacturing PMI registering a reading of 48.4.

The drop in manufacturing activity in China pressured oil prices downwards, as fears mount of a hard landing for the world's second largest economy and biggest oil consumer. Also affecting the prices, Iran's announcement that it won't participate in a proposed output cut deal between Russia and OPEC to ease the global oversupply, which threatens the deal overall.

Brent crude futures fell 60 cents, or 1.67% to trade at $35.38 a barrel. U.S. West Texas Intermediary (WTI) crude futures retreated 54 cents, or 1.61% to $33.06 a barrel.

Chinese shares tumbled nearly 1.5% after the bleak data, while Hong Kong's shares gave up 1.13%. Other Asian markets were more upbeat, with Japan's Nikkei jumping 2.0% to a two-week high at 17,861, buoyed by a surprise cut of deposit rates into negative territory by the Bank of Japan, for the first time in the nation's history.

South Korea's exports fell to their lowest levels since the global financial crisis, heightening the challenges facing global traders in a time when flows are slowing sharply due in part to China's woes. Korea's KOSPI index managed to score some profits however, rising about half a percent, while Australian shares gained nearly 0.80%.

Most currencies were largely flat, with the dollar index slipping 0.06% to 99.53. The greenback rose 0.20% against the hammered yen however to 121.33, near a six-week high hit on Friday at 121.65. Sterling recovered some losses, climbing 0.15% against the dollar to 1.4263.

Investors wait for a barrage of data today, with Britain's manufacturing PMI expected at 51.8 for January, barely down from December's 51.9, and would be the lowest in four months, which is negative for sterling.

From the U.S., ISM manufacturing PMI is forecast at 48.6, better than the previous reading's 48.2, but still deep in contracting territory, which is negative for the economy and the dollar.  

Latest news

Gold futures rose for December delivery according to the Asian session on Friday. As it increased by 0.47%, to be traded at the price of 1959.00 dollars per ounce, and it was previously traded at a
09-2020 18 06:02:31

Oil prices rose this morning, due to the halt in oil and gas production due to a hurricane in the United States of America, as the price of crude oil increased by approximately 1.5%, reaching 41.13 d
09-2020 16 06:30:20

We open the trading week with a rise in gold prices today, after it witnessed a decline in the last days of last week, as it is a safe haven for investors, especially when crises that negatively affe
09-2020 14 06:22:57

Gold prices experienced a remarkable decline at the beginning of the week after it concluded its Asian trading at a high, affected by the great rush of investors, if this morning the gold futures con
08-2020 31 08:11:31

We start today's events, Tuesday, by the rise in oil prices affected by the easing of precautionary measures to combat turquoise corona in the world. US West Texas crude futures are expected to decre
08-2020 26 04:51:45

More News

Logs

Advertisements