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    NYLON HANDOVER: PMI data points to further global weakness

    Weakner PMI services data across Europe, UK and US raise further concerns for global growth prospects.





    LONDON and US SESSION

    • - EUR and GBP crosses sold off overnight after a mixed data set;
    • In the Eurozone retail sales y/y were up 2.3% (vs 1.8% forecasts) but flat m/m whilst investor confidence also beat expectations;
    • - However, PMI Services data (a leading indicator for growth) for US, Spain, Italy, Germany, Eurozone and UK all fell below expectations.
    • - Manufacturing PMI data for US also fell short of expectations for US on Friday, making it very difficult for FED to justify a rate rise.
    • Global stocks continued to rally from their multi-year lows overnight

    IN ASIA TODAY:

     

    • - RBA Cash right at 2:30pm; Rates expected to remain on hold but we’ll be closely watching for any changes in the statement. RBA have continually said they think FED are ‘on track’ to raise rates this year, but this is clearly no longer the case. So I expect this comment to be removed and for AUD to sell off (as traders will take this as a pending rate cut some time in future)
    • - Trade balance is also at 11:30 but, unless there is some crazy print, expect cash rate statement to dominate the session


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