Advanced readings for German flash PMI came in at 44.7 versus a consensus of 45.2 while the euro zone services came in slightly better than expected at 46.8 versus 46.4. These readings continue to highlight the dire situation within Europe. Calls for action from the ECB will continue to come hard but rate cuts at this point might prove to be more of a nice gesture than a helping hand. With the Fed continuing their quasi-QE programme along with the Bank of England announcing new simulative measures, the ECB will likely be looked at with increasingly disapproving eyes the longer they put off action.

European troubles are starting to manifest themselves in Chinese factories as data overnight showed that the HSBC Flash Purchasing Managers Index fell to a seven-month low of 48.1, with a reading below 50, as we all know, marking contraction. While this comes as no surprise, it does provide further confirmation that the European debt saga has far-reaching implications. Economic growth is expected to continue to slow this quarter for China; but the question remains by how much.