tock markets in both Europe and North America along with commodities like crude oil and copper lurched lower today. Volkswagen’s growing problems including more investigations, provisions, potential profit warnings and rumours its CEO could be replaced sent its stock down another 18%. Volkswagen has soured sentiment toward automakers in general with German companies outpacing their US counterparts to the downside.
Biotech stocks also fell hard for a second day in a row with traders waiting for the next shoe to drop. On Monday, Democratic Presidential candidate Hillary Clinton indicated she plans to announce a plan to deal with the high cost of drugs and “price gouging”.
Traders continue to respond to dovish developments related to monetary policy as a negative sign of weakness. Speculation the pressure could be on ECB President Draghi to announce more QE stimulus at his speech Wednesday sent major indices on the continent down over 3% on the day with the Dax down 3.8% while in contrast the FTSE fell 2.8% and at the time of writing the Dow is down 1.3%.
Concerns about slow economies in Europe and China also have been weighing on commodity prices today. Oil and metals markets could be active again today as Flash manufacturing and service PMI reports for China, Germany, France and the US give the street an initial indication of how major world economies are performing so far this month and whether slowdown fears are well founded or unfounded.
In currency markets, USD and JPY remain at the top of the heap. Interestingly, resource currencies like CAD, AUD and NZD have not fallen very far while CHF is running in the middle of the pack with gold. GBP, EUR and continental have been under the most pressure indicating people remain worried about the economic and political situation in Europe. CAD could be active Wednesday between oil inventories and retail sales reports.
There have been no major announcements after the US close today.
Significant announcements released overnight include:
US consumer confidence 0.6% vs street 0.4%
US Richmond Fed (5) vs street 2
Upcoming significant announcements include:
6:30 pm EDT US Atlanta Fed President Lockhart speaking
10:00 am AEST Australia leading index previous (0.2%)
11:45 am AEST China flash manufacturing PMI street 47.5 vs previous 47.3
3:00 pm AEST Singapore consumer prices street (0.6%)
3:00 pm AEST Singapore core CPI street 0.3%
8:00 am BST France GDP update street 1.0%
8:00 am BST France flash manufacturing PMI street 48.6
8:00 am BST France flash service PMI street 51.0
8:00 am BST Germany flash manuf PMI street 52.6
8:00 am BST Germany flash service PMI street 54.5
9:00 am BST Norway unemployment rate street 4.5%
9:00 am BST Poland unemployment rate street 10.0%
8:30 am EDT Canada retail sales street 0.7%
8:30 am EDT Canada retail ex auto street 0.5%
9:00 am EDT ECB President Draghi speaking
9:45 am EDT US flash manufacturing PMI street 52.8 vs previous 53 0
10:30 am EDT US DOE crude oil inventories street (1.25 mmbbls)
10:30 am EDT US DOE gasoline inventories street (0.85 mmbbls)
12:45 am EDT US FOMC Lockhart speaking
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