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Wall Street indices are mostly down after the extended weekend. US500 is down by 0.30%, Dow Jones is down by 0.4%, while US100 remains flat.
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Most EU indices experienced slight declines. The German DAX (DE30) contract is trading around 15780 points, down by 0.40%.
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Today brought weaker PMI data for services in EU countries, which after several months of resistance, are starting to align with poorer PMI readings for the manufacturing sector.
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Released PMI indicators for the service sector from European countries disappointed, indicating a continued slowdown. The Eurozone's PMI fell below expectations, dropping from 50.9 to 47.9 points, well below the preliminary estimate of 48.3 points.
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The Eurozone composite PMI dropped to 46.7 against an expected 47 points. This marks the lowest reading since 2020. HCOB comments that while the Eurozone did not enter a recession in the first half of the year, the second half remains uncertain. The services sector, which provided stability for months, now appears to be a significant hindrance, and the industrial sector likely has not reached its bottom yet.
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Summary of PMI readings:
- Spain: 49.3 (expected 51.5; previous: 52.8)
- Italy: 49.8 (expected: 50.3; previous: 51.5)
- France (fin.): 46 (expected: 46.7; previous: 47.1)
- Germany (fin.): 47.3 (expected: 47.3; previous: 52.3)
- EMU (fin.): 47.9 (expected: 48.3; previous: 50.9)
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Increased risk aversion is also driving a stronger dollar. EURUSD is down 0.65% today at a rate of 1.0727. The dollar is gaining against most currency pairs.
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Similarly, USDJPY is up by 0.85%, approaching peaks from the end of the last year. Japanese authorities historically communicated that the yen is too weak at 144-146 levels, and currently, the USDJPY rate is rising to 147.700.
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EURUSD dropped below the key technical support at 1.0750.
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Significant drops are also observed in AUDUSD, where the rate fell below 0.6400 today, testing the lows from August 17 at 0.6365.
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Oil prices are experiencing heightened volatility due to Saudi Arabia and Russia announcing new extensions of voluntary oil production cuts. OIL.WTI tested $88.0 per barrel today, setting a new local maximum, confirming the uptrend since May of this year.
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Gold prices are falling due to the strong dollar, with the precious metal's rate dropping below $1930.
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In the cryptocurrency market, prices are stabilizing around recent lows. Bitcoin's price has returned to trading with lower volatility, possibly indicating upcoming larger movements.
Gold prices are reentering the descending channel. If the negative sentiment persists, there's a risk of testing the support zone at $1900 - $1905.
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