Asian markets open the week generally lower as worry over China's economy continues. The MSCI Asia-Pacific ex-Japan index dropped as much as -1% and is heading back to this year's low made back in July. Nikkei is also trading down -100 pts, or nearly -0.5% at the time of writing. The Caixin/Market PMI PMI manufacturing index was finalized at 47.8 in July, revised down from initial estimate of 48.2. That's also the lowest level since November 2011. The statement noted that "the downturn in China's manufacturing sector intensified at the start of the third quarter." And, "renewed falls in both total new work and new export orders led manufacturers to cut production at the fastest rate since November 2011." The official PMI manufacturing dropped to to in July, hitting five month low. Also released in Asian session, Japan PMI manufacturing was revised down to 51.2 in July. Australia TD securities inflation expectation rose 0.2% mom in July, HIA new home sales rose 0.5% mom in June.
The economic calendar is rather busy today, in a week with jam packed heavy weight events. PMIs will be a major focus in European session. Swiss SVME PMI is expected to rise to 50.6 in July. Eurozone will release PMI manufacturing final reading for July. The market moving could be found in UK PMI manufacturing, which is expected to rise to 51.6 in July. Sterling was the strongest major currency in July and is looking for momentum to extend its gain. Markets are currently expecting a rate hike from BoE by May 2016. But analysts are leaning towards pulling ahead the expectations. the upcoming BoE meeting will provide the market with an unprecedented batch of information. For the first time, BoE will release policy decisions, votes and economic forecasts together. There are speculations that some MPC members might start to vote for a rate hike.
From US, personal income is expected to show 0.3% growth in June while spending is expected to grow 0.2%. PCE deflator and core PCE are expected to be unchanged at 0.2% yoy and 1.2% yoy respectively. A major focus is in ISM manufacturing which is expected to be unchanged at 53.5. The employment component of ISM manufacturing jumped sharply to 55.5 in June, from April's low of 48.3. The employment component will be closely watched for hints on the performance of non-farm payroll to be released on Friday. Also, construction spending will also be released today.