Asian Equity markets were under pressure again overnight, as the China Manufacturing PMI disappointed, falling to a 6 yr low of 47 vs 47.5 expected. So more selling after a risk-off session in NY yesterday. I still favour European bourses for shorts however.
Commodity currencies under pressure and Aud has inverted it's role as the lone survivor. So the whole commodity complex is now suffering - especially after more negative news from China. I still favour Cad & Nzd shorts vs. USD.
Euro also under pressure – and it's not acting as a funding currency as it previously did. This implies that EUR-specific factors may be contributing to the move..perhaps augmented expectations for additional ECB easing? This sets a high bar for dovishness at President Draghi’s quarterly hearing before European parliament later today. I'm not playing the Euro yet...rather, I want to hear what Draghi has to say, and see how the market reacts.
Investors seem to be questioning the signals received from the Fed...in particular, is seems that the USD is poised for more strength, as jawboning from various FOMC voters this week have been much more positive than the initial perception led us to believe.
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