ECB’s headache now a migraine

Risk trading strategies found some temporary relief overnight, at least before the Euro session opened from the world's second largest economy - China. It has reversed some of yesterday's market negativity that followed the weekend comments made by China's Finance Minister not amending economic policies, despite some softer recent economic indicators. This morning's reprieve was kick started by China's HSBC flash manufacturing PMI. It's the first gauge of activity in September and it has avoided falling into contraction, overturning some of yesterday's bearish sentiment that was on display closing out the US markets. Despite China's flash PMI being better (50.5 vs. 50), the devil remains in the details. Amongst the notable components, new orders and export orders both increased at a faster rate, but the employment component has decreased at an accelerated rate. It seems, despite the activity in the manufacturing sector showing signs of stabilization; the market remains weary of China's property downturn, believing it remains the country's biggest downside risk to growth. Despite giving risk a jumpstart, many believe that China needs to implement broad stimulus measures to support Chinese economic activity. Hopes that better than expected China PMI would spur material market relief look a tad too optimistic, now that diverging Euro PMI's has followed it, according to investing.com