A global slowdown? Of course, just look at the PMI's...

News over the weekend and equally so first thing this morning has all been focused on global PMI prints, which are maintaining their softening bias. They are coming in not only weaker than expected but, more importantly, steadily slipping sub the 50 reading watermark.

With the US on holiday today and market participants slowly returning to their desk from August summer holidays, today will likely be spent with listless trading as most also attempt to digest the actual impact of Friday’s Jackson Hole statement from Ben Bernanke.

Price action on Friday afternoon was chaotic to say the least and I for one haven’t been able to directly understand exactly how the market has taken his remarks. There, of course, remains an underlying tone of impending QE3 and whether or not this happens next week at the September FOMC meeting is almost a 50/50 play right now. Data on IMM/CFTC has for the first time this year indicated that USD shorts are now genuinely in play, while net positioning in the EUR has been heavily reduced from the previous short side.

In other news, the Chinese PMI was horrible (HSBC print almost as expected) and poor retail sales data from Australia both combined to see the little battler probe further downside. Opening with a gap lower on Sunday in Asian trade, the AUDUSD has yet to recover and fill that gap so far today. With the RBA meeting overnight (early London morning tomorrow) there are some that are now calling for a rate cut from the Antipodeans central bank, I however don’t think we’ll get it just yet.

In relative terms and on a fundamental basis it’s hard to fathom some of the crosses to be trading where they are, and yet here we go...

Given that we are now genuinely trading politics as opposed to economics the road will continue to be bumpy into Q4, with the first hurdles coming later this week with the much anticipated bazooka(ish) ECB meeting where new bond buying (conditional or otherwise) may be announced. Super Mario may shed further light on the topic later today as he’s scheduled to speak sometime in the European afternoon. Next week’s German constitutional court ruling will be equally if not more important and will present the next real marquee event (outside of NFP this Friday).

I don’t have a firm feeling for this market at present and will spend what is otherwise going to be a quiet day looking at charts and pondering the binary nature of where this market could go for the remainder of this week. Levels for the major pairs will be forthcoming tomorrow after and some navel gazing this afternoon.

Helmets on.