China's economy continues to show cracks as industrial output, retail sales, and new home prices all headed south in July. This prompted the central bank to deliver a surprise rate cut, widening the gap between Chinese and U.S. yields to a 16-year high. The dismal data and rate cut have fuelled bets that China will keep loosening monetary policy even if it sinks the yuan further. Meanwhile, Asian stocks swooned to an 11-week low following the dreary Chinese data and renewed jitters about U.S. interest rates after upbeat retail sales. China's troubled property sector still languishes despite half-hearted incentives for homebuyers, and economists expect prices and sales to keep spiralling downward. The weak outlook for China's economy and markets stands in stark contrast to the ongoing tightening cycles in the U.S. and elsewhere.

EQUITY

The S&P 500 closed below its 50-day moving average for the first time since March, snapping a nearly 3-year streak and signalling further losses may lie ahead. Weak economic data from China and a stronger than expected US retail sales report pushed stocks lower globally as interest rate concerns mounted. Nvidia was a bright spot as analysts lifted price targets, while banks fell on a ratings downgrade warning from Fitch Ratings and Home Depot warned of slowing demand.

GOLD

Gold prices were flat on Wednesday after briefly breaching the $1,900 support level the previous day, as strong US retail sales fuelled speculation the Federal Reserve will continue raising interest rates, though gold found some support from lower Treasury yields and economic concerns in China.

OIL

Oil prices dipped on weak demand from China, though tight supply and falling U.S. crude inventories prevented further losses. High U.S. gasoline prices are squeezing drivers ahead of Labour Day weekend as refinery outages and below-average fuel stockpiles push pump prices to their highest this year. Hurricane risks also loom as NOAA raises its storm outlook, which could disrupt refineries and affect gasoline supplies during peak hurricane season.

CURRENCY

The dollar was flat after strong US retail sales, while the yuan sank to a 9-month low after China cut rates. The yen slid past 145 per dollar with little reaction from Japan, leading to suspicion that the BoJ may now tolerate more weakness to aid exports. The Argentine peso and its economy face uncertainty after a far-right candidate who wants to scrap the currency won a recent primary election.