Article Highlights

  • Australian AIG Manufacturing PMI: 46.3 vs. 45.4 previous
  • Japanese Tankan Survey: 12 vs. 14 forecast, 12 previous
  • Chineses PMI Manufacturing: 50.1 vs. 49.7 forecast, 49.9 previous
  • Australia Building Approvals: -3.2% vs. -4.0% forecast, 5.9% previous
  • Chinese HSBC/Markit PMI Manufacturing: 49.6 vs. 49.3 forecast, 49.2 previous
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Chinese PMI data was the economic focus of the morning, with the main government number surprising to the upside and coming in above the 50-mark that differentiates between growth and contraction.  This number was better than the HSBC manufacturing PMI number, which came in below 50, but better-than-expected at 49.6.

This positive sentiment conflicts with recent sentiment that the economy is facing downward pressure and that the People’s Bank of China will have to increase easing measures, so it’s no surprise that we saw a slight jump in risk assets, including the Australian dollar, one of China’s major trading partners.  The pop higher was quickly faded but the Aussie is holding onto its gains for the session, ignoring the negative but better-than-expected Australian building approvals data:

AUD/USD is up 25 pips (+0.33%) to .7628, AUD/JPY is up 6 pips (+0.07%) to 91.41, and AUD/NZD is up 54 pips (+0.53%) to 1.0225

The Bank of Japan’s Tankan survey came in mixed, but the focus was on the manufacturing component which came in below expectations, showing a declining confidence among Japan’s big manufacturers. The non-manufacturing component surprised to the upside with a 19 vs. 16 previous read, showing improving sentiment in Japan’s services sector. As usual with mixed data, the reaction in the Japanese yen was muted, but it gave up some its early session gains after the report, likely on the Chinese manufacturing PMI data sparking broad risk-on sentiment:

USD/JPY is down 24 pips (-0.21%) to 119.85, NZD/JPY is down 30 pips (-0.34%) to 89.36, and CAD/JPY is breakeven on the session at 94.66 after bouncing back from 94.30 lows

The monthly global manufacturing PMI data continues in the upcoming London session forex calendar, with the most notable reads starting at 7:30 am GMT from from Switzerland (47.5 forecast vs. 47.3 previous).  Then we’ll get various euro zone countries reporting around 8:00 am GMT, with the broad forecast/previous number at 51.9, and the U.K. will round it out by delivering their number (54.4 forecast vs. 54.1 previous) at 8:30 am GMT.

U.S. Session Recap

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