Following last week's Flash PMI print of 49.6, the Final print for January China Manufacturing dropped further to 49.5 confirming the contraction is deepening. Japanese stocks were down the most since August in the early going as Nikkei futures extended the losses from the US day-session (and rather notably decoupled from USDJPY and breaking below 15,000). The Nikkei is heading for the worst month since May 2012 (-8.66% so far). S&P futures tracked USDJPY as 102.00 was defended aggressively. Chinese stocks are also tumbling (though not as hard as Japan and US) and the PBOC will not be adding liquidity today. Furthermore the blame is being shifted as Deputy FinMin Zhu warns that the "Chinese economy faces risks from overseas uncertainty." EM FX is drifting lower still.
The Final HSBC Manufacturing PMI print dropped from 49.6 Flash to 49.5 - its biggest drop since June and lowest since July 2013...
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The Lowlights...
"Employment levels at Chinese manufacturers had quickest reduction of payroll numbers since March 2009"
"New export orders declined for the second month running in January, firms mentioned weaker demand in a number of key export markets."
Bad for Australia: "the rate of input price deflation was marked overall, amid reports of lower raw material costs."
"Reduced cost burdens were passed on to clients and marked the second consecutive month of discounting"
Japanese bank stocks are down 9% in the last 5 days and Real Estate stocks -12.5% in the last 2 weeks. But most concerning to Abe (and the rest of the carry-trade addicted mob) is the disconnect between JPY and NKY...
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The Nikei is now down over 500 points from its post-Turkey-is-fixed euphoria.
EM FX continues its slide...
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In other news, the Baltic Dry Index has now plunged 51% from its late December highs and has collapsed to 5-month lows...
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Charts: Bloomberg