Markets are off to a slow start as most major exchanges are still closed for the holiday. Over the weekend, China printed its official manufacturing and non-manufacturing PMI readings which seem to have dampened investor sentiment. The official manufacturing PMI is down from 51.7 to 51.4 versus the projected dip to 51.6 while the non-manufacturing PMI fell from 54.7 to 54.5 to reflect a slower pace of industry growth. This also comes after reports that Chinese investors have been putting their money in offshore companies and assets, even as the government has imposed some measures to curb this kind of activity recently.
AUD/USD is down from the .7240 area to .7215, NZD/USD is down from .6975 to .6950, and USD/CAD is at 1.3435. The dollar is mostly weaker against its other counterparts, though, as traders seem to be feeling the jitters ahead of Trump’s inauguration later in the month. USD/JPY is down to 116.75, USD/CHF is down to 1.0180, EUR/USD is up to 1.0535, and GBP/USD is up to 1.2325.
European PMI readings due
The only catalysts for the day are the manufacturing PMI readings from the top euro zone economies. The Spanish manufacturing PMI is expected to rise from 54.5 to 54.6 while the Italian manufacturing PMI could tick up from 52.2 to 52.3. The French final manufacturing PMI could come in unchanged at 53.5 while the German final manufacturing PMI is also expecting no revisions at 55.5. The region’s final PMI reading could come in at 54.9.
EUR/JPY is trading at 123.25, GBP/JPY is trading at 143.90, EUR/GBP is at .8550, EUR/AUD is at 1.4600, EUR/NZD is at 1.5175, EUR/CAD is at 1.4150, GBP/AUD is at 1.7075, GBP/NZD is at 1.7750, and GBP/CAD is at 1.6580.
Tuesday is slated to be a more active one in terms of economic releases, although Japanese banks are still closed by then. Australia will print its AIG manufacturing index while China will have its Caixin manufacturing PMI released. Preliminary CPI readings are due from France and Germany, although the focus could remain on Italy’s banking sector. The UK will print its manufacturing PMI and likely show a fall from 53.4 to 53.3 in December. US ISM manufacturing PMI is also due and this should provide some clues on how the December NFP reading due on Friday might turn out, possibly allowing traders to project when the Fed might hike rates next.