U.S. Session Forex Recap – May 2, 2016

  • Canadian economy contracted by 0.1% in Feb as expected
  • U.S. core PCE price index up by 0.1% as expected
  • U.S. employment cost index up by 0.6% in Q1
  • Chicago PMI slumped from 53.6 to 50.4 vs. 53.1 forecast
  • U.S. personal income up 0.4%, personal spending down 0.1%
  • Chinese official manu PMI fell from 50.2 to 50.1 vs. 50.3 estimate
  • Chinese official non-manu PMI down from 53.8 to 53.5
  • Australian AIG manufacturing index fell from 58.1 to 53.4

The Greenback’s performance was as mixed as a bag of M&Ms while the Japanese yen continued to reign supreme against its forex peers in Friday’s New York session.

Major Events:

U.S. economic releases – Data from the U.S. economy also came in mixed, as a couple of reports came in line with expectations while the Chicago PMI fell short. The manufacturing index slumped from 53.6 to 50.4 in March, indicating a much weaker pace of industry growth, instead of coming in at 53.1.

Meanwhile the core PCE price index, which is said to be the Fed’s preferred inflation measure, printed a 0.1% uptick as expected. The employment cost index, which is considered an indicator of wage growth and consumer inflation, came in line with the consensus of a 0.6% increase for Q1. Personal income showed a slightly stronger than expected 0.4% gain while personal spending lagged with a mere 0.1% increase.

Canadian GDP release – The monthly GDP release from Canada showed that the economy contracted by 0.1% as expected in February. Components of the report showed that declines in wholesale trade and manufacturing output were the biggest drags on growth. On the other hand, retail trade, construction, and public sector services posted decent gains.

Chinese official PMI readings – Over the weekend, the world’s second largest economy printed its latest batch of official PMI figures. The manufacturing PMI fell from 50.2 to 50.1 instead of rising to the estimated 50.3 figure while the non-manufacturing PMI slipped from 53.8 to 53.5 to indicate a slower pace of industry expansion. Chinese banks are closed for the Labor Day holiday today.

Major Currency Movers:

JPY – The Japanese yen seemed unstoppable in its post-BOJ rally, as it continued to rake in gains against its counterparts.

USD/JPY pulled up to a high of 107.42 before eventually tumbling to a low of 106.22, EUR/JPY is down to the 122.00 major psychological level, GBP/JPY dropped from a high of 152.78 to a low of 155.32, and CAD/JPY is testing support at the 85.00 handle.

AUD – The Aussie just couldn’t stop the bleeding on Friday, as traders probably made adjustments ahead of the Chinese PMI releases over the weekend.

AUD/USD fell from a session high of .7648 to a low of .7587, AUD/JPY crashed all the way down to the 81.00 handle, AUD/CAD fell from the .9600 area to a low of .9526, and EUR/AUD popped above the 1.4900 handle to a high of 1.5094.

Watch Out For:

  • Chinese banks closed in observation of Labor Day
  • 1:00 am GMT: Australian MI inflation gauge
  • 1:30 am GMT: Australian NAB business confidence index
  • 2:00 am GMT: Japanese final manufacturing PMI

See also:

Asian Session Recap

London Session Recap

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