For a few minutes this morning, it looked like US stocks might be able to stem the wave of selling pressure that has pushed them lower lately but early hopes were dashed by very disappointing US PMI and auto sales reports. Although it has been clear throughout January that the weather has been unusually stormy and cold across much of North America, the short-term impact on the economy became clear today and could be confirmed later in the week by the payroll reports. A decline in Canadian PMI suggests that the weather may have distorted results north of the border as well. The PMI shock ripped the rug out from under stocks sending the Dow to a 300+ point loss by afternoon and the NASDAQ to over a 100 point loss, sending more downward momentum into Asia Pacific trading. Defensive capital flows out of stocks have found their way back into the usual havens sending gold, CHF and JPY to the top of the charts. It’s important for traders to remember though that the impact of weather tends to be short term and any weather related inaction tends to create a backlog that could boost the economy in February or March when the weather improves. For today, the focus shifts down under for Australia’s monthly RBA meeting and interest rate decision. Although the central bank is not expected to make any changes, traders may be looking to see if the bank will change its outlook in the wake of last month’s surprise big employment contraction or yesterday’s weak PMI report. Any comments related to AUD may also attract attention as the bank has been actively talking down the Dollar in recent months including not-so veiled threats of intervention. Traders may also look for any indication of whether the dollar declines of recent months have replaced the need for lower interest rates. Tomorrow, focus turns to employment with the New Zealand and US ADP payroll reports along with service PMI numbers as a very big week for data and decisions continues. Corporate News US automakers reported significant sales declines which they blamed on bad weather keeping customers at home in January. Ford down 7.5% worse than street down 2.3% General Motors down 12.0% vs street down 2.5% Aftermarket earnings reports include: Yum! Brands $0.86 vs street $0.79 Anadarko $0.74 vs street $0.91 Economic News Significant announcements released overnight include: Australia 46.7 vs previous 47.6 UK 56.7 vs previous 57.3 Germany 56.5 vs previous 56.3 France 49.3 vs previuos 48.8 Italy 53.1 vs previuos 53.3 Spain 52.2 vs previous 50.8 Greece 51.2 vs previous 49.6 First time above 50 since August 2009 (53 months)!! Turkey 52.7 vs previous 53.5 Poland 55.4 vs previous 53.2 South Africa 49.9 flat US Markit 53.7 vs street 53.8 US ISM 51.0 vs street 56.0 vs previous 57.0 Canada 51.7 vs street 53.5 Brazil 50.8 vs previous 50.5 US construction spending street 0.0% Upcoming significant announcements include: 2:30 pm AEDT Australia interest rate decision 2.50% no change expected 8:00 am GMT Spain unemployment street 100K vs previous (107K) 9:30 am GMT UK construction PMI street 61.5 vs previous 62.1 10:00 am EST US factory orders street (1.8%) 10:30 am EST Mexico manufacturing PMI


Disclaimer: CMC Markets is an execution-only service provider. The material (whether or not it states any opinions) is for general information purposes only, and does not take into account your personal circumstances or objectives. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by CMC Markets or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although we are not specifically prevented from dealing before providing this material, we do not seek to take advantage of the material prior to its dissemination.