Commodity prices generally plunge as rising supplies, weaker growth in China and strong dollar hit the asset class

•     Commodity prices generally plunge as rising supplies, weaker growth in China and strong dollar hit the asset class

–    Oil, natural gas down sharply

–    Copper, nickel fell despite Chinese moves to support housing market

–    Many agricultural commodities fall too; corn hits five-year low

•     Naturally, commodity currencies (AUD, CAD) are weaker

–    Likely to continue to fall as long as commodities fall

–    Softer commodities make it harder for ECB to hit its inflation target = EUR-negative

–    Impact on EM currencies not necessarily what you’d think; commodity importers aren’t necessarily stronger, exporters aren’t necessarily weaker

•     Japan tankan better than expected; USD/JPY follows stocks

–    Stocks up due to better tankan, USD/JPY up as well

•     Today:

–    Eurozone: PMI day:  PMIs for many smaller countries, final PMIs for Eurozone etc.

–    UK:  Manufacturing PMI expected to be up slightly, could support GBP

–    US: ADP report expected to show more job gains this month than last month = USD-positive