Natural gas rises amid rising demand. The manufacturing sector in Australia and China shows a decline

September 3, 2024

The American stock market did not trade yesterday due to the bank holiday.

Equity markets in Europe traded yesterday without a single dynamics. German DAX (DE40) rose by 0.13%, French CAC 40 (FR40) closed with an increase of 0.20%, Spanish IBEX 35 (ES35) fell by 0.06%, British FTSE 100 (UK100) closed at negative 0.15%.

Quotes of ASML and SAP added almost 1% each. Meanwhile, Volkswagen rebounded from early losses to close 1.4% higher, sharply outperforming losses at other automakers after announcing new cost-cutting measures and that it did not rule out closing plants in Germany. On the data side, the Eurozone and domestic manufacturing PMIs for August were revised slightly higher from preliminary estimates but still pointed to a continued contraction in factory activity.

WTI crude oil prices are holding below $74 a barrel on Tuesday after strong selling pressure in recent sessions, weakened by rising expectations of increased supply. OPEC recently announced plans to increase production, with the eight OPEC+ members expected to increase output by 180,000 bpd.

The US natural gas (XNG/USD) prices rose to $2.2 per MMBtu amid new signs of robust demand for gas requiring cooling. The Midwest experienced record-high temperatures over the weekend, and more than 60 million people received heat warnings, boosting demand for air conditioning. Meanwhile, investors continued to assess domestic gas supplies this year after a slowdown in LNG exports.

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Asian markets traded flat yesterday. Japan’s Nikkei 225 (JP225) was up 0.14%, China’s FTSE China A50 (CHA50) was down 1.33%, Hong Kong’s Hang Seng (HK50) lost 1.65%, while Australia’s ASX 200 (AU200) was positive 0.22%.

The Australian dollar fell as low as $0.675, hitting a more than one-week low, as lower iron ore and other commodity prices pressured the currency as the country’s economy relies heavily on commodity exports. Investors also digested data that government spending was the main driver of economic growth last quarter, indicating potential weakness in the economy. In addition, Australia’s manufacturing sector continued to contract in August as high borrowing costs and weak demand weighed on new orders.

The offshore yuan depreciated to 7.12 per dollar, extending its fall from the previous session, as mixed PMI data in China fueled expectations of further stimulus measures. With traders now firmly expecting a Fed rate cut in September, they believe this could give the People’s Bank of China the opportunity to ease monetary policy without triggering capital outflows. The latest official data showed that Chinese manufacturing activity contracted sharply in August, the sharpest decline since February, while service sector activity rose slightly from an eight-month low.

S&P 500 (US500) 5,648.40 0 (0%)

Dow Jones (US30) 41,563.08 0 (0%)

DAX (DE40) 18,930.85 +23.93 (+0.13%)

FTSE 100 (UK100) 8,363.84 −12.79 (−0.15%)

USD Index 101.64 −0.05 (−0.05%)

Important events today:

– Switzerland Consumer Price Index (m/m) at 09:30 (GMT+3);
– Switzerland GDP (m/m) at 10:00 (GMT+3);
– Canada Manufacturing PMI (m/m) at 16:30 (GMT+3);
– US ISM Manufacturing PMI (m/m) at 17:00 (GMT+3).

By JustMarkets

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.

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Natural gas rises amid rising demand. The manufacturing sector in Australia and China shows a decline