Global market sell-off deepens on PMI manufacturing data

Monday, December 01, 2014

China’s manufacturing PMI declined to 50.3 m/m in November, compared to 50.8 in October missing analysts’ expectations of 50.5. HSBC manufacturing PMI remained unchanged at 50.0 m/m in November, in line with expectations. Following the disappointing Chinese manufacturing data, the Hang Seng index plunged more than 600 points (-2.58%) towards 23360.

Hang Seng index retreated more than 600 points (-2.58%)

HSI Index (Hong Kong Hang Seng I 2014-12-01 09-04-07

However, the Nikkei index remained in positive territory adding 130 points (+0.75%) to retest 17,600. Following reports in major Japanese newspapers, the economy will matter more to Japanese voters than security and nuclear policies when they cast their votes on 14th December 2014.

European equity markets opened the week in negative territory following the recent bearish momentum across the equity and commodity markets and the heavy sell-off in crude oil prices. The CAC, DAX, IBEX and London equity benchmark came under further pressure this morning, retreating between 0.25% and 0.9% in early trade. Germany's manufacturing PMI plunged below the key level of 50.0 to 49.5 in November missing analysts' expectations of 50.0. The release of Markit manufacturing PMI data from Eurozone, UK and the US could provide further direction.

Germany's Markit manufacturing PMI declines below 50.0 for the first time since June 2013 

MPMIDEMA Index (Markit _BME Germa 2014-12-01 09-01-47

Crude oil prices extended losses this morning as WTI front month futures plunged below $64 per barrel and Brent front month futures slid below $68 per barrel. The oil fundamentals remain fairly bearish following ample crude oil supplies in the US. In addition, global oil demand has been fairly tepid in the last few months following the disappointing macroeconomic data from the US and China. OPEC’s decision added further downside pressure to the market, weighing heavily on market sentiment.  

WTI front month futures extend losses 

CLF5 Comdty (WTI CRUDE FUTURE  J 2014-12-01 09-05-14

Precious metal prices continue their downside momentum as gold slid lower to retest $1160/ounce and silver plunged more than 1.7% in early trade this morning to retest $15. Platinum and palladium extended losses due to bearish fundamentals.

XAU- Gold spot

XAU Curncy (Gold Spot   $_Oz )  D 2014-12-01 09-06-31

Swiss voters rejected a measure in a referendum requiring the Swiss central bank to hold a portion of its assets in gold. The “Save Our Swiss Gold” proposal stipulated that the Swiss National Bank hold at least 20% of its 520-billion-franc ($538 billion), according to Bloomberg.

 

Events for today: 

0200

CN

Nov

Manufacturing PMI

0245

CN

Nov

HSBC Manufacturing PMI

0855

DE

Nov

Markit Manufacturing PMI

0900

EZ

Nov

Markit Manufacturing PMI

0930

UK

Nov

Markit Manufacturing PMI

1445

US

Nov

Markit Manufacturing PMI

1500

US

Nov

ISM Manufacturing

 

All times UK Local Time

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