S&P 500 futures are moving lower in premarket trading as global markets are under pressure after the release of disappointing economic data from China.
China’s Industrial Production grew by 6.4% year-over-year in July compared to analyst consensus which called for growth of 7.8%. China’s Retail Sales increased by 8.5% year-over-year in July compared to analyst consensus of 11.5%.
The reports indicated that the new wave of coronavirus, which is fueled by the more contagious Delta variant, has already put some pressure on China’s economy.
The coronavirus situation in the Asian region remains tense, and markets are worried that it could put pressure on the recovery of the global economy.
WTI Oil Tries To Settle Below $66.50
WTI oil gained downside momentum and managed to get below the $67 level as traders focused on the recent economic reports from China.
Markets are worried that China’s growth will slow down due to the spread of the Delta variant of coronavirus, which will put pressure on demand for oil.
The recent Baker Hughes report indicated that the number of U.S. rigs drilling for oil increased by 10 to 397 which served as an additional bearish catalyst as traders worry that U.S. domestic production may increase.
According to the latest EIA Weekly Petroleum Status Report, U.S. domestic oil production increased from 11.2 million barrels per day (bpd) to 11.3 million bpd, and the continuation of this trend may put additional pressure on the oil market.
Gold Pulls Back After Rally
Gold faced resistance at the 20 EMA at $1780 and pulled back while the U.S. dollar moved higher against a broad basket of currencies. Treasury yields have started to rebound after the recent pullback which served as an additional bearish catalyst for precious metals.
On Friday, traders rushed to buy gold mining stocks which traded near multi-week lows while gold continued its rebound. It remains to be seen whether this rebound will be continued today as gold’s pullback may hurt the fragile demand for gold mining stocks.