Macroeconomic events were weak across the board, sending stocks lower as investors fled from risky assets. China's PMI data slid to the lowest level since March 2009. In the US, Moody's warned that US AAA rating was at risk if policymakers failed to agree on the 1.2 trillion in spending cut over 10 years. Yields of German bunds soared after a disappointing auction of the country's securities. Wall Street plummeted with DJIA and S&P 500 losing -2.05% and -2.21% respectively. Oil prices also slumped as vulnerable economic outlook is detrimental for energy demand.

The HSBC preliminary China PMI data fell to 48 in November down from 51 in November, suggesting the country's manufacturing activities fell to the contractionary territory. The trend indicated that China industrial production will slow further. This once again fueled speculations that the Chinese government would ease monetary policies in coming months.

In the US, the dataflow was weak. Initial jobless claims surprisingly rose to 393K in the week ended November 18 from 388K a month ago. The market had anticipated a dip to 387K. Final reading of the University of Michigan index slipped to 64.1 in November from initial projection of 64.2. The market had anticipated an upward revision to 64.5. The overhang of budget cut remained unresolved. Moody's warned that it might downgrade the top credit rating of the US if the Congress trims the deficit reduction plan worth of 1.2 trillion. A statement released by the agency indicated that 'while a change in the composition of the spending cuts would not be a major rating consideration, a reduction in the total amount ... could have negative rating implications'.

Germany's bond auction disappointed the market, raising worries that the sovereign debt crisis in the Eurozone has spread from the debt-ridden periphery to core economies. The country only received 3.89B euro of bids for 10-year bond sales worth of 6.00B euro. The market described the outcome as 'truly miserable' and a 'disaster' as it showed that the Eurozone's biggest economy has experienced difficulty in securing public funding. The situation in France, the second largest economy in the 17-nation region, was not better off. Following Moody's and S&P's, Fitch's warned that the credit rating of France is at risk. In a report to investors, 'the increase in government debt has largely exhausted the fiscal space to absorb further adverse shocks without undermining their [France's] AAA status'. Worse still, 'the intensification of the Eurozone crisis will generate contingent liabilities' which will affect France's debts.