There's more bad news for Chinese manufacturing, the euro area recovery continues and Puerto Rico faces a deadline. Here are some of the things that people in markets are talking about today.
Chinese manufacturing still weak
Chinese authorities did not get much time to celebrate the yuan's inclusion in the IMF's SDR currency basket as new data overnight showed manufacturing continued to contract in the world's second-largest economy. The official purchasing managers index fell to 49.6 in November, the lowest level since 2012 and below expectations for a drop to 49.8. On the flipside, the services index rose to 53.6. Stocks in China gained, lead by developers expecting further stimulus from the Chinese government to fight the ongoing slowdown.
Euro area recovery continues
Markit Economics said that its Purchasing Managers Index for the euro area rose to 52.8 in November from 52.3 the previous month. All euro area countries, with the exception of Greece, are seeing expansion in their manufacturing sectors. There was also good news on the employment front with Germany's unemployment rate falling to a record low of 6.3 percent while in Italy unemployment dropped more than expected to reach 11.5 percent. However, it is unlikely that this improving data will do anything to hold back the European Central Bank's easing plans on Thursday.
U.K. banks rally
Royal Bank of Scotland Group Plc and Standard Chartered Plc rose in London trading after passing the latest round of stress tests from the Bank of England. Investors had been concerned that the banks would be forced to raise more capital by the BoE. This isn't the end for stress-tests though, as BOE Governor Mark Carney backed plans to widen the financial stability net to include investment funds in the U.K.
Puerto Rico deadline
The long-running Puerto Rican debt saga may reach a turning point today as the commonwealth must choose between paying investors $354 million in principal and interest or keeping the cash for government services. Governor Alejandro Garcia Padilla will appear before a hearing of the Senate Judiciary Committee today amid a continued lack of any consensus on how to help his administration.
We warned yesterday that there are a lot of important economic events toward the back-end of this week, but that does not mean data will be light ahead of Thursday and Friday. Today in the U.S., Markit Manufacturing PMI is due at 9:45 a.m. ET and ISM manufacturing at 10:00 a.m. Total vehicle sales for November are also scheduled to be published later today, with expectations for 18.1 million units last month, a slight drop on October's 18.12 million.
What we've been reading
This is what's caught our eye over the last 24 hours.
- Odd Lots Podcast: Could a hedge funder solve the U.S.'s high prescription drug costs?
- The Bloomberg carbon clock.
- Europe's 'coal curtain' is complicating the climate fight.
- Brazil GDP falls more than expected...
- ... as insiders worry more about a senator's arrest than BTG's Esteves'.
- ECB/Fed divergence may last beyond Mario Draghi's term as president.
- Boom and bust in the Bakken oil fields.
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