Investors are worried and taking profit is printed on their minds this morning, as the social unrest continues in Hong Kong which has caused the worst two day sell off for some of the indices in Asia since February. When you have this much uncertainty, investors love risk off trade or alternatively stay on the side lines till the storm passes away. Fuelling the fire, was the Chinese manufacturing economic data which missed the estimates and this has raised concerns further about the growth slow down in China. It is almost certain that the Chinese government have a little or no chance of maintaining their growth target for this year which was over 7%. Yes, the central bank is still trying to boost the growth in the region and the recent liquidity injection was the evidence of that. However, more commitment is surely needed from the Central Bank to keep its economy going.
European futures are trading lower early this morning. The ECB meeting on Thursday will be very much in focus especially when we will receive the inflation data for the Euro zone today. The forecast is for 0.3%. We also have the unemployment data for Germany and Italy later on today and there will be no surprise to see once again the divergence in the unemployment numbers for these two countries while the unemployment rate for the Euro Zone may have remained unchanged with the final reading of 11.5%.
Disclaimer: The above is for informational purposes only and NOT to be construed as specific trading advice. responsibility for trade decisions is solely with the reader.