The US still enjoys a strong economy, something the euro-zone doesn't.
The Euro received a cold shower or a reality check, and reality bites. Markit's German Manufacturing Purchasing Managers' Index crashed to 44.7, well below the 50-point threshold that separates contraction from expansion and significantly below 48 expected. Services PMI stood at 54.9 points, only marginally above projections.
French data was weak as well with both sectors having PMIs below 50. The composite stands at 48.7. Estimates stood at 50.7 points. The bottom line is the euro-zone composite PMI which stands at 51.3, below 52 expected.
These data are for March and are forward-looking. They reflect a weak first quarter and bleak prospects for the future. EUR/USD reacted with a crash, dipping below 1.1300. German 10-year bond yields fell to 0% for the first time since 2016.
The euro was hardly cheered by the "Brextension." European Union leaders decided to postpone Brexit to at least April 12th, adding two more weeks of relief. If the UK Parliament finally approves the Withdrawal Agreement, the UK will leave on May 22nd in an orderly fashion. If not, it is either a hard Brexit on April 12th or perhaps a long delay that could also entail new leadership, new elections, or a second referendum.
The can was kicked down the road.
Later today, Markit's US Flash PMI data for March and Existing Home Sales for February will be of interest.
A further reaction to the devastating data, Brexit developments and perhaps news from the Mueller investigation could rock markets. The Special Counsel may publish his conclusions as early as today according to speculation in Washington.
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Concerns about the direction of the global economy roiled the dollar as the business outlook in the United States faded and Europe's tilted towards recession.