FX News Today
- Markets didn’t have a good start to 2019 as disappointing data out of China rekindled concerns about the health of the Chinese economy.
- China’s Caixin manufacturing PMI fell into contraction territory at 49.7, which together with the fact that both private and official PMIs suggest a correction in orders inflow saw investors heading for cover.
- Japan remained closed but Hang Seng and CSI 300 declined -2.68% and -1.38% respectively, while the ASX lost -1.57%.
- Chinese 10-year yields dropped -12.1 bp and stock futures in the US and Europe are also heading south, indicating wide spread losses for stock markets on the first trading day of the year.
- The broad market movement suggests a drop of the Dollar, as a cautious mood prevailed on the first trading day of the year on concerns over global growth, the US government shutdown and a slower pace of Federal Reserve rate hikes.
- In addition, the worse than expected Dallas Fed index, which plunged to a 30-month low in the last day of the month also had its bearing on the Dollar.
- Oil prices also fell back and the front end WTI future is trading at USD 44.82 per barrel.
Charts of the Day
Main Macro Events Today
- EU Markit Manufacturing PMI – The European manufacturing index is expected to have remained flat at 51.4 in December. Among the countries, the Italian and Spanish indices are expected to have decreased slightly, while it is expected to have remained similar for the rest of the large countries.
- UK Markit Manufacturing PMI – In the UK, manufacturing is expected to have deteriorated in December and stand at 52.5, compared to 53.1 in November.
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Dr Nektarios Michail
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