Intraday Market Thoughts

Onto Spain & France Auctions, Ezone PMIs, China PMI FInally Contracts

by Kyle Morrison
Dec 1, 2011 8:09

Eurozone final PMIs seen confirming the upcoming contraction, France and Spanish bond auctions due, Sarkozy to outline treaty change proposals, UK manufacturing PMI expected to weaken further, China manufacturing PMI also slips back into contraction, Swiss GDP nears contraction territory, US ISM and weekly jobless. There are 17 new Premium Trades from last night w/ new multi-time frame charts in EURUSD.

The state of the European economy comes back into focus this morning after yesterdays strong rally on the back of the central bank measures to prevent another credit crunch, amongst Europes banks.

The joint action shows that even if politicians cant act in a co-ordinated manner at least central banks can. It is no silver bullet however and in some respects makes the problems worse for the Southern European economies as it sends the overvalued euro higher, making the road to recovery much more difficult as their economies struggle to grow.

There are 17 new Premium Trades from last night w/ new multi-time frame charts in EURUSD. One of the two EURJPY longs has already hit all targets. There are also new trades on GBPCAD after the 2-week old positions hit all targets. New Trades on EURUSD, EURJPY, GBPCAD, USDCAD, ES, Silver, Gold, CL_F Direct Access to these trades is found here: NonSubscribers can join here:

The final manufacturing PMI readings for France, Germany, Italy and the Eurozone are all expected to confirm that the core countries in Europe are firmly in contraction territory, with concerns that Europes second largest economy could be vulnerable to a ratings downgrade from one of the big three very soon. Egan Jones, one of the smaller agencies downgraded France last night citing a disastrous trend.

With concerns about borrowing costs front and centre todays French bond auction will be closely monitored for demand and the yields returned. France is looking to sell 2017, 2021, 2026 and 2041 bonds, totalling 4.5bn in a key test of investor confidence.

Spain is also looking to sell 2015, 2016 and 2017 bonds totalling 3.75bn.

Meanwhile in Switzerland, Swiss Q2 GDP slowed to 0.2% from 0.5%, the weakest growth since Q2 2009.

President Sarkozy is expected to outline proposals for treaty changes in Toulon, in order to enforce fiscal discipline.

In the UK the latest November manufacturing PMI is expected to show that the UK manufacturing sector remains in the doldrums, especially given the downbeat tone of the Chancellor earlier this week and this weeks depressing OECD assessment of the UK economy over the next two quarters. It is expected to come in at 47, down from 47.4 in October.

Yesterday's RRR cut by China soon emerged last night after the latest HSBC and official manufacturing PMI numbers showed that the Chinese economy remained fairly lacklustre in the face of the problems in Europe. The official measure of manufacturing PMI fell below 50 for the first time since Feb 2009, while the HSBC measure came in at 47.7, down from a previous 51.

US weekly jobless claims and the latest ISM manufacturing data will also be closely waited to see if they continue this weeks trend of much better than expected US economic data.


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