Since the data dropped the ASX has been in a vertical drive, with the defensive stocks extending their negative run while the big miners have doubled back on themselves to see red for the first time this financial year.
It is hard to see this getting any better with the HSBC Flash PMI data due out at 11:45. The difference here is the HSBC numbers look at small and medium enterprise and this data has been contracting for three months and officially hit contraction last month. Any revision down will heap even more pressure on the market and the will see the start of FY14 further in the red.
What has been interesting from the PMI data is the AUD. It shrugged off the news, seeing the AUD/USD higher by 0.2% to $0.9157 which suggests shorters may be getting nervous about the rapid devaluing of the AUD over the last seven weeks and are concern the current levels have major support.
Considering the swaps market is only pricing in an 18% chance of a cut tomorrow this would be even greater cause for concern for those holding AUD shorts and may see the pair holding firm.