The Day So Far
2016 has begun with a whimper as European equities have been rattled by a volatile trading session in Asia, where the Chinese blue-chip CSI 300 index fell 7% and the small-cap Shenzhen Composite fell the most in 9 years. Trading was then halted for the day as new circuit-breakers came into effect. Investors are worried in particular about the imminent unwinding of many of the protective measures put in place by the Chinese regulators during the extremely volatile period for markets last summer, which included the infamous ‘Black Monday’ selloff. Notably, the ban on short selling, put in place last July, is set to expire, and many fear this will lead to a fresh wave of selling to start the year. To cap it all, the Chinese manufacturing PMI shrank for a 5 49.7, below the 50 level which indicates economic expansion. The Dax has fallen as much as 4% on the day, whilst US equities were far from immune from the carnage, the S&P 500 testing the critical 2000 handle before rebounding a touch.
Elsewhere, WTI crude briefly jumped above $38 as tensions rose between Saudi Arabia and Iran after the execution of 47 people, many of whom were Shia, by the Saudis on Saturday.
The Afternoon View
Busy start to month in terms of economic data, with the ISM Manufacturing the highlight at 15:00 GMT. The ISM Manufacturing has diminished in importance in recent years as the contribution of the manufacturing sector to US economic growth has gradually reduced, but it remains an important piece of data nonetheless and a focal point for traders today. We are kicking off the year with a short bias in the S&P, although our 2 weeks. Short euro and crude were some of the more popular trades for 2015, though I think both are poised for a rebound this year as the multi-year dollar rally begins to falter and crude supply starts to come off, we are sticking with a short bias for now in both for today. th straight month in December, coming in at nd target is 2000, which has been a solid area of support in recent
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