Cocktail of cooling labor market and degrowth in the GDP

Yesterday’s GDP numbers?showed?the U.S. economy expanded 2.1% (Vs Est. 2.4%) in the Q2. The data also revealed a substantial increase in consumer spending during Jul. The PCE price index in the US increased by 0.2% m-o-m in Jul and 4.2% on y-o-y. Non-farm payroll numbers are due tomorrow. This cocktail of cooling labor market and degrowth in the GDP suggests deceleration of the economic activity, and almost confirms that Federal Reserve will not hike interest rates in Sep.

The dollar index is up and trading above 103.50, after losing about 1% in the last three days. The yield on the 10-year US Treasury note held its decline at 4.1%. Brent crude held above $85 per barrel, underpinned by a large decline in US crude inventories. Gold strengthened above $1,940 an ounce on Thursday, underpinned by weaker-than-expected US economic data. A moderate trading day was seen across the base metals complex, as prices have fluctuated across the board. Dr. Copper, by and large, remained around $8,400 a ton. Aluminum saw some gains, testing the resistance of $2,200 a ton before 3M Ali settling at $2,204 a ton.

The Chinese government is continuing to provide support for the economy, aiming to stimulate local spending. New policies are being introduced, from cutting taxes on equity trading to lowering mortgage rates; however, this move is yet to prove successful. Domestic expenditure remains lacklustre, and many consumers are awaiting more steps from the government to incite spending. China's largest private property developer, Country Garden,?warned of default risks?if its financial performance continued to deteriorate.

Zaijian!