EQUITIES

Shares were mixed on Monday, as investors monitored market reaction to Chinese economic data.

Japan's Nikkei 225 edged up 1.09% after the country reported an expansion of 2.2% in its Q2 GDP. The S&P/ASX 200 in Australia rose 0.45%.

Mainland China markets were mixed. The Shanghai Composite rose slightly and in Hong Kong, the Hang Seng index was 0.27% lower. Singapore’s FTSE Straits Times Index slipped 0.16%.

India and South Korea markets are closed for a holiday Monday.

European markets are set to open in positive territory on Monday, continuing a positive trend seen at the close of trading last week.

OIL

Oil prices dropped for a second session on Monday as weak China economic data triggered concerns about demand at the world's largest crude importer while the head of the world's top exporter, Saudi Aramco, said it was ready to ramp up output.

The prices also weighed as traders are cautious in case progress was made on a possible European-brokered nuclear deal with Iran. More supplies could come if Iran and the U.S. accept an offer from the European Union to revive the 2015 nuclear deal, which would lift sanctions on Iranian oil exports.

Brent crude futures fell 1%, to $97.00 a barrel after settling 1.5% lower on Friday. U.S. West Texas Intermediate crude was at $91.07 a barrel, down 0.82%, after a 2.4% drop in the previous session.

CURRENCIES

The U.S. dollar index erased earlier losses to gain 0.1% against its rivals to 105.768, consolidating near the middle of its range this month.

The yield curve still deeply inverted. The U.S. 10-year Treasury yields were last trading at 2.842%.

Leading cryptocurrencies bitcoin and ether rose back toward more than two-month peaks. Bitcoin last rose 2% to $24,813, bringing it close to Sunday's high of $25,053, a level not seen since June 13. Smaller rival ether gained 2.94% to $1,993.70, approaching Sunday's peak of $2,031.56, the highest since May 23.

GOLD

Gold prices slipped, having gained 1.6% last week as it weighed down by a rebound in the U.S. dollar and expectations of further interest rate hikes from the Federal Reserve to tame high inflation.

Spot gold was down 0.67% at $1,792.00 per ounce, while U.S. gold futures fell 0.42% to $1,807.90.

Spot silver dropped 1% to $20.61 per ounce, platinum fell 0.9% to $953.67, and palladium was steady at $2,223.22.

ECONOMIC OUTLOOK

Shares were mixed on Monday as investors navigate on China's economic data earlier today, while keeping anxious to see if Wall Street can sustain its rally, as hopes U.S. inflation has peaked will be tested by likely hawkish commentary from the Federal Reserve this week. Geopolitical risks also remain high with a delegation of U.S. lawmakers in Taiwan for a two-day trip.

China’s industrial output and retail sales data for July missed expectations as the real estate slump and COVID-19 controls dragged down on growth, adding to a disappointing reading on new bank lending.

Retail sales grew by 2.7% in July from a year ago, the National Bureau of Statistics said Monday, below the 5% growth forecast, and down from growth of 3.1% in June. Industrial production rose by 3.8%, also missing expectations for 4.6% growth and a drop from the prior month’s 3.9% increase.

To support the economy, the People's Bank of China (PBOC) had unexpectedly cut a key interest rate for the second time this year and withdrew some cash from the banking system on Monday.

Next, investors will be watching out for minutes from the Fed's last monetary policy meeting due on Wednesday for more clues on future rate hikes. Markets are still implying around a 50% chance the Fed will hike by 75 basis points in September and that rates will rise to around 3.50-3.75% by the end of the year. Hopes for a soft economic landing will also get a health check from U.S. retail sales data that is expected to show a sharp slowdown in spending in July.

There is also a risk earnings from major retailers later this week, including Walmart and Target, could be laced with warnings about a downturn in demand.