- Japanese Tankan manufacturing index up from 12 to 15
- Japanese Tankan non-manufacturing index up from 19 to 23
- Japan’s final June manufacturing PMI upgraded from 49.9 to 50.1
- China’s official manufacturing PMI steady at 50.2 in June as expected
- China’s official non-manufacturing PMI climbed from 53.2 to 53.8 in June
- Chinese HSBC final June manufacturing PMI revised from 49.6 to 49.4
- Australian building approvals rebounded by 2.3% in May, -5.2% previous
- Euro zone final manufacturing PMI readings due
- U.K. manufacturing PMI to rise from 52.0 to 52.6?
- Eurogroup meetings scheduled today
Asian session forex traders seemed to shrug off the news that Greece has officially defaulted on its IMF loan, as the focus shifted to business activity reports. In Japan, the Tankan survey indicated that the manufacturing index climbed from 12 to 15 while the non-manufacturing index improved from 19 to 23. To top it off, the final June manufacturing PMI reading was upgraded from 49.9 to 50.1, reflecting industry expansion.
Over in China, the official manufacturing PMI held steady at 50.2 in June as expected while the non-manufacturing PMI rose from 53.2 to 53.8, indicating stronger growth in the sector. However, the final manufacturing PMI reported by HSBC was downgraded from the initial 49.6 estimate to 49.4, which means that the contraction was worse than previously indicated.
Nonetheless, risk sentiment sided in favor of the higher-yielding currencies in the past few hours, as the business survey results suggested that things aren’t so bad in the world’s second and third largest economies. AUD/USD is up 22 pips (+0.28%), NZD/USD is up 44 pips (+0.65%), AUD/JPY is up 28 pips (+0.31%), and NZD/JPY is up 56 pips (+0.67%). It also helped that Australia reported a 2.3% rebound in building approvals, partly erasing the 5.2% decline seen in the previous month.
Manufacturing PMI reports could continue to hog the forex spotlight in the upcoming London trading session, as the euro zone’s top economies and the U.K. are set to print their readings for June. Switzerland is also gearing up to release its manufacturing PMI and might show a climb from 49.4 to 50.0, which might be positive for the franc.
Keep in mind, however, that Eurogroup meetings are still scheduled for today and that these could feature discussions on what Greece’s next steps might be. European currencies are trading slightly lower at the moment, with EUR/USD down 6 pips (-0.05%), GBP/USD down 16 pips (-0.09%), and USD/CHF up 14 pips (+0.15%). As always, be on the lookout for any announcements that could affect market risk appetite!
Bonnie and Clyde, peanut butter and jelly, Justin Bieber and his hair. Some things just go well together.
In forex trading, you get better odds at securing pips when your fundamental analysis is complemented by technical analysis. Head on to Big Pippin’s Daily Chart Art for some pip-locking technical setups!