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Stocks Tumble: Is This the Start of Another Leg Down?

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There's a bunch of euro data, the dollar extends its weakness, and it's earnings day for big oil. Here are some of the things people in markets are talking about today.

Euro area GDP rises; inflation, unemployment drop

This morning markets got a snapshot of progress in the euro area recovery as data released showed first-quarter GDP expanded 0.6 percent - more than expected - while unemployment dropped to 10.2 percent. Inflation came in lower than expected at -0.2 percent. At a national level, both France and Spain beat growth forecasts in the first quarter. The euro currency strengthened above $1.14 following the releases.

Dollar extends weakness

The dollar spot index is at its lowest level since August 2015, with low economic growth in the U.S. backing the Federal Reserve's dovish stance. The falling currency is boosting commodities, with crude oil jumping 20 percent this month. The weakness is also being felt in Asia where the yen dipped below 107 to the dollar this morning while China’s central bank reacted by strengthening its currency fixing the most since a peg was dismantled in July 2005.

Oil earnings

With most of the big tech names now having reported, today is big oil's turn to update the market on progress in the first quarter. Exxon Mobil Corp.'s results will be watched closely as the company recently lost its top credit rating which it had held since the Great Depression. Chevron Corp. is also due to announce results today as the oil recovery has added $400 billion to the MSCI World Energy Index since the start of February. Speaking of earnings, both Amazon.com Inc. and LinkedIn Corp. delivered strong reports after the close of trading yesterday and are expected to surge today.

Markets lower

Stock markets across the world are lower on the last day of trading for the month. Overnight in Asia the MSCI Asia Pacific Excluding Japan Index retreated 0.6 percent with Japanese markets closed for a holiday. In Europe the Stoxx 600 Index was 1.5 percent lower at 6:07 a.m ET with Royal Bank of Scotland Group Plc dropping 1.7 percent after reporting a widening net loss. S&P 500 futures were flat

Goldman v Morgan Stanley

There is an interesting development in the U.S. Treasury market, where two of Wall Street's biggest institutions are calling for the market to move in opposing directions. Goldman Sachs Group Inc. said Treasuries are set to weaken as the Fed is poised to raise rates while Morgan Stanley forecasts a rally. In Europe, concerns in the bond market still center around the Brexit debate, with analysts saying that U.K. inflation linked bonds may provide protection in the event of an exit. 

What we've been reading 

This is what's caught our eye over the last 24 hours.

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