- Chinese HSBC flash manufacturing PMI down from 50.7 to 49.2 in March
- Japan’s March flash manufacturing PMI fell from 51.6 to 50.4
- Australia’s CB leading index showed 0.4% gain for Jan
- Nikkei down 0.21% for the day
- U.K. headline and core CPI up for release
- German and French manufacturing and services PMIs due
It’s all about the manufacturing PMI estimates for today, as both China and Japan printed their readings for March. In China, the HSBC flash manufacturing PMI dropped from 50.7 to 49.2 and indicated industry contraction. Japan was slightly better off, as its flash manufacturing PMI dipped from 51.6 to 50.4, reflecting a slower pace of industry expansion.
Forex traders lost some of their appetite for riskier and higher-yielding assets due to these reports, with the Nikkei chalking up a 0.21% loss for the day. AUD/USD is down 10 pips (-0.12%), NZD/USD is lower by 14 pips (-0.14%) and AUD/JPY is down 18 pips (-0.17%). Not even the 0.4% uptick in Australia’s CB leading index for January was enough to keep the Aussie afloat against its counterparts today, as analysts started talking about another potential easing move from the Chinese central bank.
The forex calendar suggests that all eyes and ears could be on the U.K. CPI release (10:30 am GMT) and the euro zone PMIs (9:00 am GMT) in the upcoming London trading session. Germany and France are set to print their manufacturing and services PMI readings for March, with both countries expected to show improvements in both industries. Stronger than expected data could allow the euro to hold on to its recent gains and possibly go for more, as these could support Draghi’s claims that a recovery is taking hold.
Meanwhile, another downturn in inflation is eyed for the U.K., as the economy could show a drop from 0.3% to 0.1% in its headline CPI and a decline from 1.4% to 1.3% in its core CPI. Weaker than expected data could spark more pound weakness since this might add confirmation to BOE policymakers’ fears that local currency strength is weighing further on price levels.
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