Equity markets dip on China manufacturing PMI and Middle-East tensions
- Australia AIG manufacturing index 51.9 vs. 52.5 previously
- Japan final manufacturing PMI 52.6 vs. 52.5
- China Manufacturing PMI 48.2 vs. 48.9
- Australia commodity prices y/y -23.3% vs. -21.8% previously
- Spain manufacturing PMI 53 vs. 53.1
- Swiss manufacturing PMI 52.1 vs. 50.2
- Italy manufacturing PMI 55.6 vs. 54.9
- France manufacturing PMI 51.4 vs. 51.6
- German manufacturing PMI 53.2 vs. 53.0
- Eurozone final manufacturing PMI 53.2 vs. 53.1
- UK manufacturing PMI 51.9 vs. 52.8
- M4 Money supply m/m 0.4% vs. 0.5%
- Mortgage approvals 70k vs. 70k
Coming up
- Canada manufacturing PMI
- US final manufacturing PMI
- US ISM manufacturing PMI
- US Construction spending
- US ISM manufacturing prices
The markets opened the first trading day of the New Year on a disappointing note as China’s manufacturing PMI declined to 48.2 against expectations of 48.9. The declines post a nearly 10 month straight decline in manufacturing prices, which sent the Shanghai Composite Index losing close to 7.0% triggering the circuit breakers to halt trading for the day. The declines rubbed off into other markets as well as the Nikkei225 slumped by nearly -3.0%. The declines saw a bid to safe haven currencies as the Yen firmed up strongly to the Dollar. USDJPY touched session lows of 118.7Yen before stabilizing. At the time of writing, USDJPY was trading at 119.06, losing -0.96% for the day. The gains in the Yen came about as the Japanese final manufacturing PMI came out modestly stronger at 52.6 against estimates of 52.5. The commodity risk currencies are also down strongly with AUDUSD trading at 0.719, losing nearly -1.41% for the day, erasing the previous 6 days winning streak. Data from Australia today included the AIG manufacturing index which was soft at 51.9, while the commodity prices declined -23.3% for the year, down from -21.8% previously. The NZDUSD lost -1.21% for the day, continuing its decline since December 30th.
The European session opened in the Red as the German DAX was down -4.04% while the FTSE100 shed -2.31% for the day. EURUSD was trading modestly stronger, gaining 0.23% for the day as the single currency initially tested a session high to 1.094 before easing back lower. Economic data from Eurozone included manufacturing PMI’s which grew at the strongest pace in 20 months. The Euro was however muted to the data but was trading stronger across the board. Data from the UK was limited to the manufacturing PMI which posted a soft number at 51.9 against estimates of 52.8. The British Pound, which closed last year on a weak note managed to hold its ground, currently up 0.16% as the GBPUSD initially tested session lows of 1.469 before managing to push higher.
Another factor playing a major role in today’s markets is the Iran – Saudi Arabia political row with a few countries such as Bahrain and Sudan, expelling Iranian diplomats. Oil prices were however muted to the news but remained largely choppy. WTI Crude Oil is down -0.27% for the day but not before posting a session high to $38.25 a barrel. Gold prices are a lot steadier, gaining 1.02% for the day, with the precious metal trading at $1071.85 to an ounce.
The US trading session will see the release of manufacturing PMI numbers from Canada and the US following the ISM manufacturing PMI and manufacturing price data.
