EURUSD Near 1.34 As All PMIs Disappoint

USD is stronger across the board with the exception of JPY in the ongoing session. Risk aversion is high and equity markets are deeply in red. EURUSD tumbled to 1.3427 on weak PMIs. Eurozone industrial orders dropped in July. Market turns to US Jobless claims, Canadian Retail sales.

European September PMIs all disappointed adding to growth concerns. Not only that they came out below expectations, they also confirmed further slowdown in both manufacturing and services sectors. Eurozone manufacturing PMI printed 48.4 from 49 showing a second sub 50 result back to back. Eurozone services PMI fell below 50 for the first time since August 2009 as it printed 49.1.

German manufacturing PMI fell to 50 from 50.9 and services PMI declined to 50.3 from 51.1. French manufacturing also showed second back to back contraction when it printed 47.3 from 49.1. French service sector still expanded but at a much slower rate as PMI printed 52.5 from previous 56.8.

Eurozone Industrial orders fell 2.1% in July from -1.2% in June which implies lower industrial production in the months ahead. Considering the disappointing PMIs and deterioration in sentiment, ECB rate cut is not far-fetched as the risk of a recession increases.

The NY session starts at 8:30 am ET with Jobless claims that are seen at 419K from previous 428K. Claims stubbornly continue to hover above the 400K mark and the trend from the past two months indicates that additional rise is likely.

Canadian Retail sales that are also due at 8:30 am ET are seen at -0.2% in July from previous 0.7%. However, Core sales are expected to increase 0.2% from -0.1%.

10:00 am ET will also bring August Leading indicators index expected lower at 0.2% from 0.9% and Eurozone Consumer confidence that is anticipated to worsen to -18 from previous -16.5.

Finance ministers and central bankers meet today at the G20 conference that will last till tomorrow. Washington also hosts annual IMF and World Bank meetings on the 23rd and 24th so expect volatility inducing comments.