Overnight, US equities suffered the steepest one day sell-off in more than a year on concern over global growth, in particular in China and other emerging markets. DJIA dropped -358.04 pts, or -2.06% to close at 16990.69, losing 17000 handle. That's the largest decline since February last year. S&P 500 also dropped -43.88 pts, or -2.11% to close at 2035.73. Asian stocks follow with Nikkei trading down -420 pts, or -2.1% at the time of writing while HK HSI is down -460 pts, or -2%. In the currency markets, dollar is sharply lower against Euro and Yen as markets pare back expectation of a Fed rate hike in September. Sterling also showed weakness on the same reason. Meanwhile, Euro is the strongest major currency this week.
Sentiments are further weighed down by data from China in Asian session. The Caixin PMI manufacturing dropped to 47.1 in August versus expectation of 47.7. That's the lowest level in six and a half year since March 2009. The data showed deeper contraction in China's manufacturing sector and that wasn't helped much by stimulus by the government. Some analysts warned that the rest of Q3 could be the darkest moment for the economy in a long while. And economists are doubtful on whether there would be a rebound later in the year as the government claimed.
Elsewhere, Japan PMI manufacturing dropped to 51.9 in August versus expectation of 52.1. PMI data will be the main focus in European session. German will release Gfk consumer sentiment. UK will release public sector net borrowing. Canada will release CPI and retail sales later in US session.