Increased Risk Aversion Raises US Dollar and Japanese Yen

Market Reviews

Euro falls notably after today’s PMI data. Eurozone PMI manufacturing dropped to 51.4 in December, down from 51.8, missed expectation of 51.9. It’s a 34-month low. PMI services dropped to 51.4, down from 53.4, missed expectation of 53.4. It’s a 49-month low. PMI composite dropped to 51.3, down from 52.7, a 49-month low.

Germany PMI manufacturing dropped to 51.5, down from 51.8, missed expectation of 51.7. It’s a 33-month low. PMI services dropped to 52.5, down from 45.5, missed expectation of 53.5. It’s the lowest in 7 months. PMI composite dropped to 52.2, down from 52.3, a 48-month low.

US dollar and Japanese yen are trading as the strongest ones today, as global stock markets are back in selloff mode.

Today’s data also showed, that US retail sale rose 0.2% mom in November versus expectation of 0.1% mom. Ex-auto sales rose 0.2% mom, matched expectations. China’s retail sales rose 8.1% yoy in November, below expectation of 8.8%. Industrial production rose 5.4% yoy, below expectation of 5.9%. Fixed assets investments rose 5.9% yoy, matched expectations.

China’s Finance Ministry stated, that China will suspend 25% tariffs on 144 US vehicle and auto part items and 5% tariffs on 67 auto items between January 1 and March 31. The statement on the planned tariff suspension followed China's first major purchase of US soybeans since Donald Trump and Xi Jinping's landmark talks on trade in Argentina on December 1.

On stock markets, FTSE fell 0.66%, DAX dropped 0.65% and CAC is down 1.05%. Earlier today, Nikkei closed down 2.02%, Hong Kong HSI lost 1.62%, China Shanghai SSE dropped 1.53%. Singapore Strait Times fell 1.09%.