Ezone Manuf PMI Below 50 for 1st time in 2 years, Latest Premium Trades

Eurozone Aug manufacturing PMI joins Italy & French PMI in contraction territory for first time in 2 years. UK PMI remains in contraction. Chinese PMI, Australian retail sales, Swiss Q2 GDP slips back. Ashraf has new Premium trades after Tuesday’s EURUSD, EURGBP & EURJPY shorts hit all targets.

EURUSD drops more than 200 points since our Tuesday bearish call. We renew our negative take on the currency. The fundamental catalysts have been deepening contractions in Aug French and Italian manuf PMIs and the first contraction in overall Eurozone PMI since September 2009 (August figure at 49).

Overnight fears of a slowdown in China remain evenly balanced after slight improvements from the official measure of manufacturing PMI and the HSBC measure. Chinese manufacturing PMI for August came in at 50.9, below expectations of 51 but an improvement on the previous 50.7 measure. The HSBC measure of PMI also improved slightly from the previous contraction of 49.3, but still remained in contraction territory at 49.9. Weakening export orders remain a concern, however as doubts grow about the health of the wider global economy.

Ashraf offered the argument for his short EURUSD call on Tuesday. All 2 EURUSD trades hit their targets as well as the EURJPY and EURGBP trades. There are 10 NEW PREMIUM TRADES. 2 on EURUSD, 1 on USDJPY, 1 on EURGBP, on 1 GBPJPY, 1 on SP500 E mini futures, 1 on Dow-30 futures, 1 on gold, 1 on US crude. Premium subscrobers click here: http://ashraflaidi.com/products/sub01/access/?a=486 Nonsubscribers can become members here: http://ashraflaidi.com/products/sub01/

In Australia retail sales numbers for July showed an improvement from declines in May and June, coming in much better than expected at 0.5%. The Australian dollar continues to hold up well against the US dollar, especially given speculation about further Fed easing.

The strength of the Swiss franc continues to be a thorn in the side of the Swiss government and National Bank, though there does appear to be an acceptance that they won’t be able to weaken it in a hurry given the fiscal situation elsewhere in Europe. The effect on Swiss GDP is expected to be reflected in a lower Q2 GDP number with expectations of a slip back to 0.4% from a previous 0.6%, suggesting that the rise of the franc is starting to impact growth.