USD

The US Dollar is rallying this morning, up over 0.5% and approaching a six-month high as US traders return from the long weekend. Today's rally has been primarily fueled by market risk-aversion, following the latest disappointing PMIs from Europe and China.

On the home front, the US Logistics Manager's Index rebounded to a reading of 51.2. This rebound comes after three consecutive months of contraction and five months of all-time low readings. The rebound was driven by increased activity across all eight sub-metrics, with notable improvements in inventory levels, warehousing prices, transportation utilization, and transportation prices.

EUR

The Euro is declining this morning, falling over 0.5% and trading at its lowest level since June 12 following a disappointing batch of PMIs across the Eurozone.

The Eurozone Composite PMI dropped to 46.7 in August, indicating the most significant contraction in private sector activity since November 2020, with declining manufacturing and services sectors and a sharp drop in new orders. Germany's Composite PMI hit 44.6, the lowest since May 2020, driven by reduced demand and a slight increase in input and output inflation, while France's PMI fell to 46, marking the third consecutive contraction.

Meanwhile, Eurozone producer prices fell 7.6% year-on-year in July, marking the steepest decline since 2009, primarily driven by a significant drop in energy prices.

GBP

The British Pound is down over 0.5% on the day as traders digest the latest UK PMIs and retail sales figures.

The S&P Global/CIPS UK Composite PMI was revised higher to 48.6 for August, confirming the first contraction in the private sector since January, with reduced business activity in both manufacturing and services sectors. Manufacturing, in particular, witnessed new orders fall at the fastest rate in 39 months.

On the other hand, retail sales in the UK surged by 4.3% year-on-year in August, with health, beauty, and food and drink sectors performing strongly. However, this growth rate lagged behind the 6.8% CPI rate, suggesting a decline in sales volume.

JPY

The Japanese Yen is down more than 0.6% this morning, in the red for the third-straight day as risk-averse traders flock towards the Greenback.

Earlier, Japan released its final August of the au Jibun Bank Japan Composite PMI, which was confirmed at 52.6. The index showed an eighth consecutive month of private sector expansion, with a rise in the service sector offsetting struggles in manufacturing. New orders in the service sector increased, while both manufacturing and services sectors saw job creation. Both sectors also saw input cost inflation rise to the highest since May.

CAD

The Loonie selloff continues today, down nearly 0.5% versus the Greenback as Canadian traders return from the Labour Day long weekend. With today's declines, the Loonie is now sitting at its lowest level since late May and within striking distance of a six-month low.

The Loonie has been under pressure since Friday's dismal GDP print, which sent the odds of another BOC rate hike tomorrow below 10%. The disappointing GDP report followed in the footsteps of the most recent Canadian unemployment and retail sales numbers, both of which also came in worse than expected. 

The BOC is set to announce their decision at 10:00 AM EST tomorrow.

MXN

After a rough three-day stretch that saw the currency depreciate by more than 2.5% against the dollar, the Mexican Peso is down by more than 0.3% this morning amid broad market risk aversion favoring the greenback.

On the data front, Mexico's August consumer confidence rose slightly to 46.7 in August after coming in at 46.2 in July. This marks the best reading in the index since 2019, led by increases in all five components.

Meanwhile, Mexico's fixed investment grew by a significant 28.8% year-on-year in June, mainly due to solid growth in construction and machinery. On a monthly basis, it increased by 3.1%.

BRL

The Brazilian Real is down by over 0.4% today after barely holding onto gains in the previous two sessions. The latest moves in the Real come on the heels of fresh inflation and industrial output data out of Brazil.

Sao Paulo's consumer prices decreased by 0.20% month-on-month in August, driven by lower food, housing, and personal care prices. However, prices increased for health, clothing, transportation, and education.

On the other hand, industrial output fell well below market expectations, posting a 1.1% year-on-year decline, the steepest since April, compared to an expected decrease of only 0.5%.

CNY

The Chinese Yuan is down 0.5% this morning after China's disappointing August PMI read fueled market concerns of a global economic slowdown.

The Caixin China Composite PMI dropped to 51.7 in August, the weakest since January. It was driven mainly by a pullback in the service sector PMI to 51.8, its lowest since December 2022, thanks to slower new orders and falling exports. The services and manufacturing sectors each saw job opportunities increase, but input price inflation for the private sector rose to a five-month high.

Meanwhile, embattled Chinese property developer Country Garden Holdings managed to make two overdue bond-coupon payments before the 30-day grace period, narrowly avoiding default.