Headlines:

Markets:

  • JPY leads, GBP lags on the day
  • European equities mixed; S&P 500 futures up 0.16%
  • US 10-year yields down 6.9 bps to 4.258%
  • Gold up 0.4% to $1,904.34
  • WTI crude down 1.4% to $78.51
  • Bitcoin up 0.3% to $25,926

It was all about the PMI data releases in Europe today and there were some nasty downside surprises to the German and UK readings.

That led to selling in both the euro and pound, while the dollar kept steadier alongside the yen as bond yields also sank on the session. The poor readings were largely from the services sector, highlighting that the European economies are struggling hard in the summer and joining the manufacturing sector in contracting.

Traders pared ECB rate hike bets for September to roughly 50% while toning down their hawkish expectations on the BOE rates peak further away from 6%.

EUR/USD was hovering around 1.0860 earlier on but fell to 1.0805 and is keeping just above the crucial 1.0800 level with the 200-day moving average at 1.0797 and large option expiries at the figure level today providing some layer of defense - for now at least.

GBP/USD was arguably the bigger loser, falling from 1.2750 earlier in the day all the way down to 1.2630 levels now and testing its 100-day moving average at 1.2635.

USD/JPY kept lower throughout, with the fall in bond yields helping things along. The pair was hovering around 145.60 earlier on but is now near the lows for the day around 145.25 currently.

In other markets, oil is also down over 1% on worries about a further economic slowdown globally. Meanwhile, equities were initially turning a blind eye to the PMI data but have now seen gains pared ahead of US trading, with all eyes on the Nvidia earnings to come. Is it a case of buy the rumour, sell the fact this week?