China's August Industrial Output +4.4%yoy missed est. 5.2%, slowed down from 4.8% in July while the data suggested weakness from numerous angles with retail sales and fixed asset investment both missing estimate.
The trend for China data is expected to remain downward, pointing to weaker GDP growth in Q3. However, with these data prints backwards-looking, the markets could quickly sidestep the negative implication as investors may continue focusing on trade war news flow to drive sentiment.
The attack on the Saudi Arabian oil facility led to a risk-off start to the week. In Asian currencies, there was the predictable rush to buy USD/INR given India sensitivity to oil moves as the country is the massive importer of crude. As such, higher oil prices could cause the current account to widen.
Also, the usual haven trades were in play as the Japanese yen appreciated while Gold opened near $1500 and traded close to $ 1512 before macro names used the spike to reduce long positions as trade war winds continue to blow favourably.
Still, there remain more questions than answers about the terrorist attack so best not to jump to any conclusions.
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