EBC Markets Briefing | Yuan consolidates as domestic inflation jumped

The Chinese yuan was muted on Wednesday with oil prices pushing towards three digits. Kremlin said Russian President Putin, US ‌President Trump and Chinese President Xi may hold a trilateral meeting at the next ​APEC summit in November.

In Yemen, the Houthis launched attacks on several Saudi Arabian cities. Meanwhile, US forces hit multiple Iranian oil tankers, and Iran responded by firing missiles at an American military base in Jordan.

Driven by rising global commodity prices and strong high-tech demand, China's consumer and wholesale inflation rebounded in August, offsetting ongoing weakness in domestic spending.

Trade growth accelerated in on the month, but underperforming imports signalled that domestic demand remains weak, adding pressure on the world's second-largest economy to rebalance its development.

The massive trade surplus has led economists and foreign officials to demand that Beijing strengthen its significantly undervalued yuan, which has been a driving force behind its export boom.

Chinese government plans to fund a $54 billion capital injection into several state-owned banks and insurers, as Beijing seeks to bolster growth with constrained stimulus.

EBC Financial Group analyst says that the yuan was undergoing a tight consolidation with no potential reversal in sight, in spite of the RSI dipping below 30. The next major resistance sits around the 6.7 per dollar area.

Asset Recap

As of market close on 8 September, among EBC major products, Intel shares led gains as investors weighed a potential CPU price increase and a fresh analyst upgrade.

Amgen stock plunged following a BMO Capital downgrade and knee-jerk reaction to Novartis's Phase III trial results for a rival experimental Lp(a)-lowering drug.

The iShares Global Clean Energy ETF rose jumped primarily due to a sharp escalation in geopolitical tensions in the Middle East, which caused global energy supply anxieties.

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EBC Financial Group Disclaimer: This material is for general information purposes only and is not intended as (and should not be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by EBC Global Financial Collaboration or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.