Asian Session Forex Recap – Mar. 2, 2015

  • PBoC announced surprise interest rate cut
  • Chinese official manufacturing PMI up from 49.8 to 49.9 in Feb
  • Chinese official non-manufacturing PMI climbed from 53.7 to 53.9 in Feb
  • China’s HSBC final manufacturing PMI for Feb revised from 50.1 to 50.7
  • Australia’s MI inflation gauge fell flat in Feb
  • Australia’s quarterly company operating profits down by 0.2% vs. estimated 0.7% gain
  • Japanese quarterly capital spending up by 2.8% vs. projected 4.1% increase
  • U.K. manufacturing PMI and euro zone flash CPI figures due

So much for expecting a rebound from the world’s second largest economy! Not only did China’s official PMIs print unimpressive readings, but the country’s central bank decided to cut interest rates. Forex market analysts remarked that China definitely had this rate cut coming, as domestic demand has remained weak and the country’s debt burden is growing.

Government-released PMI readings showed small improvements though, as the official manufacturing PMI ticked up from 49.8 to 49.9 while the non-manufacturing PMI climbed from 53.7 to 53.9 in February. The HSBC manufacturing PMI was more optimistic, with the final reading revised up from 50.1 to 50.7.

Australia printed more signs of weakness, with its MI inflation gauge falling flat in February and its company operating profits missing the mark with a 0.2% decline instead of the projected 0.7% gain. AUD/USD is down 21 pips (-0.27%), AUD/JPY is lower by 20 pips (-0.22%) and NZD/USD looking at a 34-pip loss (-0.45%).

Japan also followed up its dismal data dump last Friday with a weaker than expected capital spending report, which indicated a mere 2.8% increase versus the estimated 4.1% rise and the previous 5.5% gain. USD/JPY is up 23 pips (+0.19%), EUR/JPY is moving close to the 134.00 handle (+0.08%) but GBP/JPY is down 5 pips (-0.03%) to the 184.50 minor psychological support level.

The forex calendar shows that there are a bunch of medium-tier reports lined up from the U.K. and the euro zone in the upcoming London trading session. The U.K. manufacturing PMI is due 10:30 am GMT and might show a climb from 53.0 to 53.5, which would reflect a stronger expansion in the industry. Meanwhile, the euro zone could print a 0.5% decline in its headline CPI and a 0.6% gain in core price levels for February.

Other reports that might also spur volatility among pound pairs include the U.K. Nationwide HPI, mortgage approvals, and net lending to individuals data. If you’re trading the euro, do watch out for the release of manufacturing PMI readings from Spain and Italy, as well as the euro zone unemployment rate.

U.S. Session Recap

Bonnie and Clyde, peanut butter and jelly, Justin Bieber and his hair. Some things just go well together.

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