It's PMI day, there's mixed news from Europe, and the oil surge is running out of steam. Here are some of the things that people in markets are talking about today.
China factory gauge shrinks
China's official Purchasing Managers Index fell to 49.7, the lowest level in three years, down from 50 in July. A reading below 50 indicates a contraction. The Shanghai Composite Index closed the session 1.23 percent lower, extending the biggest two-month tumble since 2008. Markets in China will be closed on Thursday and Friday of this week due to a World War II anniversary holiday.
Mixed European data
Markit Economics PMIs showed manufacturing cooled in the U.K., shrank more than initially estimated in France, and rose in Germany. Unemployment in the euro area dropped to its lowest level since early 2012, down to 10.9 percent, below expectations for 11.1 percent. European stocks are trading lower, with the Stoxx Europe 600 Index down 2.8 percent at 10:35 a.m. London time.
Oil has wiped out a month's losses in a three-day surge that has seen the price of crude traded in New York rise 27 percent. In a turnaround this morning, futures traded on the New York Mercantile Exchange are dropping with West Texas Intermediate for October delivery falling as much as $2.18 to $47.02 before recovering to $47.98 by 10:45 a.m. London time. In an interview with Bloomberg, Ian Taylor, CEO of Vitol Group BV, the world's largest independent oil trader, said that oil prices will be stuck in a range between $40 and $60 a barrel into 2016.
Economists surveyed by Bloomberg are split over whether the Federal Reserve will raise rates in September. Of those surveyed, 48 percent see an increase in the benchmark lending rate at the September 16-17 meeting. That is down from a Bloomberg survey conducted at the beginning of August where 77 percent of respondents said they expected the Fed to move at this month's meeting.
Yen, euro rise
In currency markets, the yen and the euro have risen as the dollar dropped against major peers. The yen was the biggest gainer against the dollar, rising 1.17 percent by 11:00 a.m. London time. The demand for haven currencies is being driven by uncertainty over China's growth prospects, with Simon Pianfetti, a senior manager at the market solutions department of SMBC Trust Bank Ltd. in Tokyo, saying that dollar-yen is a sell as long as Chinese stocks are falling.
What we've been reading
This is what's caught our eye over the last 24 hours.
- The migrant crisis continues in Europe, with Germany taking a humanitarian lead.
- How a McKinsey analyst sought a fortune as a Himalayan goatherd.
- The banker who gave the world credit-default swaps wants to upend finance again - with blockchain.
- Russia is putting more restrictions on the internet.
- Buy Chinese stocks at 2 p.m. in the afternoon. Profit!
- Charting the market: New month, same China.
- Was the 2010 Greek bailout a huge mistake, and if so, who made it?
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