Signs of Chinese slowdown spook oil markets
Oil has fallen heavily since the Chinese data overnight (black verticals).
- Annualised retail sales missed the forecast of 5%, printing at 2.7%, lower than the previous 3.1%
- Annualised industrial production came in at 3.8 %, missing the forecast of 4.5% and lower than the last 3.9%.
- Fixed Asset investment was 5.7%. This was below the forecasted 6.3% and the previous print of 6.1%.
These misses have worried the market, as the world's second-largest economy shows signs of stalling growth. The Covid-19 lockdowns and precarious Chinese property market are likely culprits. In response, China's central bank surprised markets with a cut to key lending rates.
Given China's importance on the demand side of energy, the signs of a slowdown have rippled through to oil prices. USOil and UKOil's H4 stochastic have dropped below 20 (blue arrows). This area indicates strong selling momentum; if these levels are maintained, energy prices will fall even lower.
Russell Shor
Senior Market Strategist
Russell Shor is a Senior Market Strategist at FXCM, having been promoted to the role in 2025 in recognition of his depth of insight and consistent delivery of high-impact market analysis. He originally joined FXCM in October 2017 as a Senior Market Specialist.
Russell holds an Honours Degree in Economics from the University of South Africa, is a certified FMVA®, and a full member of the Society of Technical Analysts (UK). With over 20 years of experience in financial markets, his work is renowned for its clarity, precision, and strategic value across asset classes.
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