- US August ISM manufacturing index 47.2 vs 47.5 expected
- US August final S&P Global manufacturing PMI 47.9 vs 48.0 prelim
- US construction spending for July -0.3% versus -0.1% expected
- Atlanta Fed Q3 GDPNow 2.0% vs 2.5% prior
- ECB's Nagel says he won't commit in advance of September rate move
- New Zealand GDT Price Index -0.4%
- ECB's Simkus: Quite unlikely that we will cut rates in October
- Canadian S&P global manufacturing PMI for August 49.5 versus 47.8 last month
- Former Fed Pres. Mester on CNBC:There will be a discussion on 25 or 50 bps at FOMC meeting
- The drop in Nvidia shares today is the largest-ever destruction of market cap
Markets:
- WTI crude oil down $3.24 to $70.31
- US 10-year yields down 6.9 bps to 3.84%
- Gold down $7 to $2491
- S&P 500 down 2.1%, Nasdaq down 3.3%
- JPY leads, AUD lags
I've been writing about a week about the poor seasonals for stocks and oil in September and they hit with a vengeance. There wasn't really a catalyst but the China PMI and US PMIs highlighted the potential for slowing growth. Neither were big surprises but they refocused markets on the possibility the Fed could fall behind the curve.
Oil was crushed on reports of a deal in Libya along with global growth concerns and some technical selling. So far $70/barrel has held but crude is at the worst levels since January.
Risk aversion was the dominant theme in markets and the yen played its usual role. The most pain was in AUD/JPY as that pair fell 2%. If there was any silver lining it was that the early US low wasn't broken late as US equity markets fell further. While there have been some total recoveries in some risk assets, AUD/JPY stalled out at the 50% retracement form the July-Aug rout.
Other signs were mixed as the euro held 1.1000 and showed some late life and cable bounced modestly.
USD/CAD will be in focus in the day ahead with the Bank of Canada rate decision. The market sees a 24% chance of a surprise 50 bps cut and the BOC isn't afraid of surprises. Still, the loonie was a solid outperformer against the antipodeans despite the rout in crude. That suggests a market that's uneasy about getting involved.
