The market mood is starting to sour in European morning trade after the French and German PMI readings are presenting a reminder that central banks are set to hike rates into a recession. The relatively uncertainty and uneasiness is causing a more risk-off mood now as equities slump and bonds are more bid.

European indices are down well over 1% on the day with S&P 500 futures falling to fresh lows, down 0.7%, currently. 10-year German bund yields are also down 11 bps to 1.51%:


Given that markets have already been jittery in the past few sessions, negating the optimism earlier in the week. I reckon we could see a heavier risk selloff in the sessions ahead with little else to change up the narrative.

The euro is taking a big knock with EUR/JPY tumbling by over 100 pips following the data releases:


The dollar and yen are more bid across the board with the latter leading the charge in trading today after retracing some of its losses from earlier in the week. EUR/USD is now down to 1.0500 while GBP/USD has taken a quick dip from 1.2235 to 1.2175, nearing minor support around 1.2160-70 at the moment.

Elsewhere, AUD/USD is also dragged to session lows and is down 0.8% to 0.6870. That is its lowest level in a week with the 14 June low at 0.6850 a key support level to watch.