Asian Session Forex Recap – May 21, 2015

  • Chinese HSBC flash manu PMI up from 48.9 to 49.1 in May vs. 49.4 forecast
  • Japan’s flash manu PMI jumped from 49.9 to 50.9 this month vs. 50.1 consensus
  • Japanese all industries activity index slumped 1.3% vs. -0.4% forecast
  • Australia’s MI inflation expectations climbed from 3.4% to 3.6% in April
  • New Zealand credit card spending increased by 7.1% in April vs. 5.2% previous
  • German and French PMIs, U.K. retail sales coming up

Forex traders didn’t even have to nurse a post-FOMC minutes hangover, as the party turned out to be quite a dull one. Instead, market watchers turned their attention to the more interesting medium-tier reports released in today’s Asian trading session. China and Japan were all about preliminary PMI readings this month and some improvements in their manufacturing sectors were seen.

In China, the HSBC flash manufacturing PMI climbed from 48.9 to 49.1 in May, short of the 49.4 consensus but still indicative of a smaller contraction in the industry. Japan showed a more impressive flash manufacturing PMI jump from 49.9 to 50.9, outpacing the forecast at 50.1 and reflecting a return to industry expansion.

USD/JPY is down 23 pips (-0.20%) after testing resistance at the 121.00 handle, EUR/JPY also retreated by 23 pips (-0.17%), and GBP/JPY is holding steady at the 188.00 mark (-0.20%).

The Australian dollar got a bit more support from the increase in MI inflation expectations for April, as this tends to translate to a pickup in consumer price levels later on. The reading climbed from 3.4% to 3.6%, allowing AUD/USD to recover by 18 pips (+0.16%) to the .7900 area and AUD/JPY to stay flat around 95.50. Meanwhile, New Zealand printed a healthy 7.1% increase in credit card spending for April, much stronger than the previous month’s 5.2% gain.

PMI readings could continue to hog the spotlight in the upcoming London forex trading session, with Germany and France gearing up to print their manufacturing and services industry figures. Small improvements are expected from France, the euro zone’s second largest economy, while Germany could show a bit of weakness in both industries. Also lined up today is the U.K. retail sales release, which is expected to post a 0.4% rebound from the previous month’s 0.5% decline. Stronger than expected data could keep the euro and the pound supported so make sure you keep tabs on these reports today!

U.S. Session Recap

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