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Today, China's central bank further injects funds into the financial system in open market operations to ease liquidity before the Lunar New Year holiday. The People's Bank of China conducted 50 billion yuan of 14-day reverse repurchase agreements (repo) and 50 billion yuan of 28-day reverse repo, a process in which central banks purchase securities from banks with agreements to resell them in the future.

Yesterday, The Institute for Supply Management’s Manufacturing PMI came in at 48.2 in January of 2016 from 48 in December. It is the fourth consecutive month of contraction in manufacturing activity.

Nordea Bank wrote on their website, The ISM manufacturing index remained in contractionary territory for the third straight month. However, a rise in the key forward-looking new orders index to above the 50 mark suggests the ISM headline index might move slightly above 50 over the next 1-2 months. On the weaker side, the employment index dropped to the weakest level since 2009, but the ISM non-manufacturing employment index will be much more important for expectations ahead of Friday’s jobs report.

And the Bank said, “We will therefore continue to carefully monitor service-sector data in coming weeks for evidence of contagion from the manufacturing sector. The focus now turns to Wednesday’s ISM non-manufacturing survey, which will also help to shape expectations ahead of Friday’s jobs report. For now, we expect a 175k gain in nonfarm payrolls in January, reflecting payback from a likely warm weather-induced boost to payroll growth in Q4.”

Oil prices fell for a second session in Asian trade on Tuesday as worries about top energy consumer China and rising oil supply weighed on markets, although possible talks between OPEC and Russia on output cuts offered some support.

The front-month contract for West Texas Intermediate (WTI) was down 46 cents or 1.36 at $31.16 by 14.40 ICT, after falling $2.00, or 5.9 percent, the session before. Despite the declines, U.S. crude is still nearly 19 percent above the more than 12-year low of $26.19 hit in mid-January.

The fall in oil prices reflected the general negative sentiment in the Asia time zone, said Ric Spooner, chief market analyst at Sydney's CMC Markets. "Stocks markets are down; oil is weakening. It all points towards negative risk sentiment across the board," he said.

Reference: The People’s Bank of China, Nordea Bank, Reuters