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 Good morning. Here's what you need to know. — Global markets have fallen into risk-off mode again to begin the week, although at the moment the damage is looking fairly limited. High-beta emerging-market currencies that have been at the center of the turmoil over the last two weeks, like the Turkish lira and the South African rand, are both stronger on the day against the U.S. dollar. The dollar is still sliding against the euro and the yen, though, and Asian markets fell in overnight trading, led downward by the Japanese Nikkei 225, which fell 2.0%. European markets are in the red across the board, and in the U.S., S&P 500 futures point to a negative open, while Treasury note futures point to a positive open. — Over the weekend, China released the results of its services-sector Purchasing Managers Index survey. The report's headline index slipped to 53.4 from December's 54.6 reading, indicating a slowdown in the pace of expansion in China's services sector over the past month. Unlike China's manufacturing PMI, however, which slipped below 50 this month, the services sector PMI points to continued growth for now. — The eurozone manufacturing PMI rose to a 32-month high of 54.0 in January from 52.7 in December, coming in just above the consensus estimate of 53.9. Germany's manufacturing PMI also hit a 32-month high of 56.5 (from 54.3 in December; 56.3 expected). Spain's manufacturing PMI posted a strong advance, with manufacturing employment rising for the first time since 2010, and Greece's manufacturing PMI broke above 50, signaling the first expansion in 53 months. In France, the index was still negative at 49.3, indicating a continued contraction in the French manufacturing sector, but the index is now at its highest level in four months. — In the U.K., manufacturing PMI slipped to 56.7 from December's 57.2 reading. Despite the slowdown, the number is still indicative of robust growth in U.K. manufacturing. One particularly bright spot in this report was the new export orders component. "The latest expansion in new export orders was broad-based by source, with U.K. manufacturers mentioning improved demand from North America, mainland Europe, Asia, Brazil, Scandinavia and the Middle East," said Markit in the release. "Moreover, the ongoing improvement in global market conditions drove the rate of increase in new export business to a near three-year record." — At 8:58 AM ET, Markit releases the final results of its January U.S. manufacturing PMI survey. The report's headline index is expected to fall to 53.9 from December's 55.7 reading, indicating a slowdown in the pace of growth in U.S. manufacturing. Preliminary estimates released by Markit earlier this month, on the other hand, suggested the index would continue to advance. — Out at 10:00 are the results of the Institute for Supply Management's monthly manufacturing survey, which is similar to Markit PMI. The ISM index is expected to fall to 56.0 from December's 57.0 reading, indicative of a minor slowdown in the pace of growth in U.S. manufacturing. The ISM prices paid index is expected to tick up to 54.0 from 53.5. — Also released at 10:00 are December construction spending data. Economists predict spending was unchanged in December after rising 1.0% in November. Unseasonally cold weather likely played a part in the slowdown. — Finally, global auto manufacturers will be reporting January sales numbers throughout the day today. Analysts predict vehicle sales rose to 15.6 million at a seasonally adjusted annualized rate from 15.3 million SAAR in December. Follow all of the data LIVE on Business Insider » — Janet Yellen will be sworn in as Fed chairman this morning at 9 AM. The next big date on the calendar for the new Fed chief is February 11, when she will deliver the central bank's semi-annual report on monetary policy in a testimony before Congress. — In an article in this morning's Wall Street Journal, Federal Reserve reporter Jon Hilsenrath writes about the biggest open question facing Fed policy at the moment: the amount of slack in the labor market. "The trend raises hard-to-answer questions for the Fed," says Hilsenrath of the recent drop in labor force participation. "Will some of these people come back to work when the economy improves or have they left permanently? Do these shifts mean there is less slack in labor markets — workers available to take jobs — than they realized, or is the slack still out there, hidden in these numbers?" MARKET COMMENTARY "We have been pursuing the line that the recent EM ructions are the product of fundamental concerns resurfacing as the liquidity tide now recedes in line with the Fed’s tapering efforts. As such, these tensions reflect the pressures that are building upon more fundamentally challenged countries rather than presaging a broader systemic crisis. "China, however, represents a potential key threat to this sanguine outlook. In essence , one could view China as the 'other side of the coin' in terms of the risk of EM being subject to a broader balance of payments crisis. The U.S. is the most evident current threat due to concern tapering will undermine or even reverse EM capital flows. The flipside of these capital account concerns though are those relating to the current account and it is here that China comes in: a more pronounced deceleration in Chinese growth threatening to directly weigh on its key EM export partners but also indirectly on resource-rich countries via falling commodity prices." —Rabobank interest rate strategists "EUR may lose some of its safe haven appeal if peripheral markets become more susceptible to external shocks to market confidence. Asset valuation, uncertainty about the prospects of another LTRO and worries about the regulatory treatment of banks’ exposure to government debt could all work to dampen domestic demand. Growing euro sensitivity to swings in global risk appetite could make the single currency more vulnerable across the board as the ECB deliberates its next policy move to fight disinflation. "EUR lost ground last week as markets started positioning for another dovish ECB meeting on Thursday. Its recent correction lower notwithstanding, investors may be hesitant to sell the euro further given its status of a safe haven currency. The second most liquid reserve currency could remain supported against G10 smalls and EM currencies if recent market volatility escalates some more. This is what happened last summer when Fed-driven market volatility forced many to opt for safety of low-beta, euro-denominated assets. It helped also, that peripheral bond yield spreads to Bunds continued tightening despite the risk sell-off." —Valentin Marinov, an FX strategist at Citi | 
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