Commodities remained under pressure in European session as investors were disappointed by the Fed and weaker-than-expected manufacturing data in China and the Eurozone. Crude oil prices slipped further with the front-month WTI contract breaching the 80 level at one point and hovering above 80 currently. The equivalent Brent crude contract lost for the 4th straight day with the price approaching 90. Gold fluctuated around 1600 as price has been pushed and pulled by the absence of QE3 and the Eurozone outlook.

According to HSBC, China's flash manufacturing PMI dipped to 48.1 in June while May's data was revised lower to 48.4. This set of data suggested that manufacturing activities in the world's second largest economy have contracted for 8 consecutive months and more stimulus is probably needed. While President Hu Jintao noted that China will maintain steady and robust growth, government official have previously signaled it won't implement stimulus measures that were as huge as those in 2008.

In the Eurozone, manufacturing activities deteriorated further as sovereign debt crisis in the periphery worsened and most countries were struggling with fiscal tightening. The manufacturing PMI slid -0.3 points to 44.8 in June. For Germany alone, the reading fell to 44.7 from 45.2 in May, compared with market expectations of 45.2. Modest improvements were seen in France with the index climbing higher to 45.3 in June from 44.7 in the prior month. The market had anticipated a drop to 44.5. In the UK, retail sales soared +3.0% y/y in May after contracting -0.3% in April. Excluding auto fuel, the regain rose +2.4% y/y, following a -1.1% drop in the prior month. The June minutes for the BOE meeting unveiled that there were 5 votes favoring no change in the size of asset purchases and 4 votes supporting additional easing. It has become increasingly likely that the central bank would announce a raise in asset purchases at the next meeting. Inflation has moderated more than anticipated and should have created a more comfortable environment for easing policies.

Concerning the US dataflow, initial jobless claims probably dipped -1K to 385K in the week ended June 16. The Philly Fed index might have improved to 0 in June from -5.8 a month ago. Existing home sales probably slid to 4.56M in May from 4.62M a month ago.