- RBA kept interest rates on hold at 2.50% as expected
- Chinese official manufacturing PMI up from 50.8 to 51.0
- China’s HSBC final June manu PMI up downgraded from 50.8 to 50.7
- Japan’s Tankan manufacturing index down from 17 to 12
- Japan’s Tankan non-manufacturing index down from 24 to 19
- Spanish and Italian manufacturing PMI due
- U.K. manufacturing PMI to dip from 57.0 to 56.7?
Surf’s up, mates! The Australian dollar caught another strong bullish wave in today’s Asian trading session, as the RBA interest rate decision and Chinese economic data gave it a boost. RBA Governor Stevens was less dovish in his recent statement, as he said he foresees inflation staying on target for the next few years.
Although Stevens pointed out that government spending will be subdued, he suggested that moderate growth in consumer demand and an increase in housing construction could make up for this. As expected, he reiterated that its prudent to have a period of stability for interest rates and that the Aussie is high by historical standards.
The improvement in China’s official manufacturing PMI from 50.8 to 51.0 in June also added support to the Australian dollar, as this hinted of stronger commodity export prospects for the Land Down Under. The HSBC final manufacturing PMI was revised down from 50.8 to 50.7.
Also released in today’s Asian trading was Japan’s Tankan survey, which reflected a slowdown in both manufacturing and non-manufacturing industries. The manufacturing component slipped from 17 to 12 while the non-manufacturing figure dropped from 24 to 19. Could this be part of the “economic fluctuations” that BOJ Governor Kuroda was referring to?
It’s all about the manufacturing sector in today’s London trading session, as Spain, Italy, and the U.K. are set to print their respective manufacturing PMIs. If their teams’ performance in the World Cup is any indication, then we might see a round of disappointments from these countries! Take note though that market watchers expect Spain and Italy to show small improvements while the UK is likely to report a slower expansion.
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