Terrible German PMI data sinks global stocks and euro

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.

Investors are still processing the Fed’s decision to push back one last rate hike to 2020 along with the wrath of softer global data.  The dollar’s strength is likely to start to worry the US and we should not be surprised if we hear the President complain.

S&P 500 futures are lower by 0.6%, while the dollar is mixed against the majors, with gains against the euro and loonie, while falling to cable and Aussie-dollar.


The euro fell hard after the terrible German PMI miss.  The bloc’s largest economy is still showing weakness and that drove the German 10-year government yield below zero for the first time since 2016.  Bunds were not expected to fall back to zero and momentum could see yields have further declines if investors want to hold insurance against a severe slowdown.

The euro is now approaching last week’s low and if we see further weakness price may target the lower boundaries of the range that has been in place since the fall.


A week to the March 29th Brexit day, but that probably does not matter as much.  The EU has given the UK an extra two weeks unconditional extension to April 12th.  The same story remains, PM May will try to push her deal forward with a meaningful vote some time next week.  The first step for May is for speaker Bercow to accept another vote on her deal, it is not expected to have too many changes, so he could not allow it.

If May’s deal is blocked or defeated, the UK will have to decide if they will want to hold European Parliament elections. Until we see some Brexit deal, the risk of a hard exit will keep the British pound’s gains capped.


Crude prices are under pressure as global growth concerns spark fears that demand might be softer than expected.  Higher oil prices have been supported by the OPEC + production cuts, sanction effects on Iran and Venezuela, along with other contributing factors, and decline with US inventories, but that may not last if demand declines.  Rising production from the US is expected to make fresh record highs and ultimately be a headwind for higher crude prices.


The precious metal is higher on the day, but not as high as much as one would expect with the cloud of global growth concerns.  While the data has been weak in Europe, optimism is still high that US/China  trade deal will get done and the trickle down effect will eventually provide a boost for both the rest of Asia and Europe.  Gold may be rangebound unless risk aversion takes over.

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Ed Moya

Ed Moya

Senior Market Analyst, The Americas at OANDA
With more than 20 years’ trading experience, Ed Moya is a senior market analyst with OANDA, producing up-to-the-minute intermarket analysis, coverage of geopolitical events, central bank policies and market reaction to corporate news. His particular expertise lies across a wide range of asset classes including FX, commodities, fixed income, stocks and cryptocurrencies. Over the course of his career, Ed has worked with some of the leading forex brokerages, research teams and news departments on Wall Street including Global Forex Trading, FX Solutions and Trading Advantage. Most recently he worked with TradeTheNews.com, where he provided market analysis on economic data and corporate news. Based in New York, Ed is a regular guest on several major financial television networks including CNBC, Bloomberg TV, Yahoo! Finance Live, Fox Business and Sky TV. His views are trusted by the world’s most renowned global newswires including Reuters, Bloomberg and the Associated Press, and he is regularly quoted in leading publications such as MSN, MarketWatch, Forbes, Breitbart, The New York Times and The Wall Street Journal. Ed holds a BA in Economics from Rutgers University.
Ed Moya