European Union macro falls after weak China results

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Last night's macro in a word is terrible.  China PMI and German manufacturing offer no relief for commodities and they are linked.

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Weaker-than-expected reading in Germany puts all of the European Union at risk for second quarter recovery as further GDP contraction looks likely.

Watch tomorrows German IFO to see if there is more hope between the lines.  The European Central Bank is now expected to cut rates when it meets next week.

European Union has been shrinking for 5 quarters as Manufacturing and Services have shrunk for 15 months.

All of this macro puts upward pressure on the U.S dollar, as if it needed any more of a boost.  Upward pressure on U.S. dollar further limits any spot commodity improvement, in fact pressures it even more. It's all very circular.  China = Germany = U.S. dollar = Commodities = China = Germany ….

Meanwhile European Union yields meanwhile at record lows… go figure.



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



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