Terrible German PMI data sinks global stocks and euro

Mar 22 13:03 2019 Print This Article

Stocks & USD – Terrible European data kills risk appetite

EUR – Euro falls as German bunds go negative

Brexit – EU throws UK a delay bone 

Oil – Stockpiles fell 9.6M even as imports rose 186K

Gold – Stronger on dovish Fed

Stocks & Dollar

US equities are off to a poor start on the final day of the week after a terrible round of data from both France and Germany, reminded traders that Europe needs the global growth outlook to improve.  The worst decline in German manufacturing in over six years disappointed many expecting the data to stabilized.  France also delivered sour results as the Gilets Jaunes protests continue to weigh on French business.

The Fed’s dovish commitment this week locks them in a corner of keeping rates on hold for the rest of the year.  Global growth has yet to see a benefit from accommodative stances that are now firmly in place by the ECB, RBA, RBNZ, BOC, and the PBOC.  One key reason growth can’t stabilize just yet stems from concerns about trade wars.  While optimism is high, albeit fading, that a trade deal will get done with China and the US, concerns are brewing that the transatlantic trade war will keep Europe down.  While the China/US trade war is well over a year long, expectations should not be for the US and Europe trade war to be nearly as long.  President Trump’s best chances of getting elected are if the economy does not fall apart by election time and that will not happen if he does not have a quick resolution with Europe.  This morning, Trump noted, “he does not want zero tariffs on cars from Europe.

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