Market Update


Friday brought another tough session for the equity investors, with Chinese and European stocks falling to multi-month lows. 

A trigger of such sharp sell-off was a poor data from the Chinese economy. Data published today, came a week after China decided to devalue its currency. That was a surprise however the move should be some reinforcement for  exporting factories. Chinese manufacturing index fell to 47.1 in August (expectations: 48.2). In general a reading above 50 indicates expansion (from the previous month) and level below 50 shows the contraction. The reading is even worse than July's (47.8) that hit 2-years low.  The Beijing's target for the year of about 7% economic growth may need some further stimulus.

On the other hand, European PMI's surprised to the upside , despite weak data from France . August business survey data signalled that growth of eurozone economic output held broadly steady at a solid pace. At 54.1, the Markit Flash Eurozone PMI ticked higher from July’s final reading of 53.9 and remained at an expansionary level for the twenty-sixth successive month. The pace of increase was one of the fastest seen over the past four years .

The market focuses now on the upcoming data from Canada (CPI) and manufacturing PMI from the United States. Print from the U.S. may have an impact on today's trade ideas.