Article Highlights

  • Chinese markets out on Tomb Sweeping Day holiday
  • Japan’s Tankan manufacturing index pops up from 10 to 12 vs. 14 expected
  • Japan’s Tankan non-manufacturing index rises from 18 to 20 vs. 19 expected
  • Japan’s final manufacturing PMI slips from 52.6 to 52.4
  • AU AIG manufacturing index slips from 59.3 to 57.5 in February
  • AU MI inflation gauge improves from -0.3% to 0.1%
  • AU retail sales dips by 0.1% vs. 0.3% uptick expected, 0.4% growth in January
  • AU building approvals jumps by 8.3% vs. 1.4% dip expected, 2.2% growth previous
  • AU ANZ job ads up by 0.3% vs. 0.8% dip expected
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Forex price action was a mixed bag of nuts, as currency-specific reports pushed the major currencies in different directions. Here’s what’s up!

Major Events:

Japan’s Tankan reports – Quarterly surveys from the BOJ showed that Japan’s big manufacturers are confident for a second straight quarter, bringing business confidence to a one-and-a-half-year high in March.

Japan’s Tankan manufacturing PMI clocked in at 12 in March, which is an improvement from December’s 10 but still missed expectations of a 14 index reading. Meanwhile, confidence in the services industry shot up from 18 to a one-year-high of 20 for the month.

Not surprisingly, it was the weak yen that mostly drove confidence higher. Business owners aren’t too complacent, however. Big companies also expect conditions to worsen slightly in the next three months as other concerns (read: Brexit and Trump’s protectionist stance) cloud their optimistic outlook.

Australia’s retail sales miss – Earlier today Australia printed a couple of top and mid-tier reports including its AIG manufacturing index, inflation gauge, building approvals, and ANZ job ads.

What caught the investors’ attention though, is the big miss in retail sales. The report showed a 0.1% decrease for the month of February when analysts had expected a 0.3% uptick after seeing 0.4% growth in January.

A closer look tells us that household goods retailing (-0.1%) and department store sales (-0.1%) all saw dips while food retailing (+0.3%), cafes, restaurants, and takeaway food services (+0.1%), and other retailing (+0.1%) saw increases in trend terms.

Overall, the retail sales miss supports the RBA’s concerns that weak wage growth as well as high debt levels are weighing on consumer spending. The possibility that this might lead to a dovish RBA statement weighed on the high-yielding Aussie for most of the session.

Market Movers:

AUD – Australia’s weak retail sales report dragged the Aussie lower for most of the session.

AUD/USD is down by another 20 pips (-0.26%) to .7612, AUD/JPY is down by 33 pips (-0.39%) to 84.70, and AUD/NZD is down by 40 pips (-0.38%) to 1.0858.

Watch Out For:

  • 6:30 am GMT: AU commodity prices (y/y)
  • 7:15 am GMT: Swiss retail sales (y/y) (-0.8% expected, -1.4% previous)
  • 7:15 am GMT: Spanish manufacturing PMI (54.6 expected, 54.8 previous)
  • 7:30 am GMT: Switzerland’s manufacturing PMI (58.2 expected, 57.8 previous)
  • 7:45 am GMT: Italian manufacturing PMI (55.2 expected, 55.0 previous)
  • 7:50 am GMT: French final manufacturing PMI expected to remain at 53.4
  • 7:55 am GMT: German final manufacturing PMI expected to remain at 58.3
  • 8:00 am GMT: Euro Zone final manufacturing PMI (56.3 expected, 56.2 previous)
  • 8:00 am GMT: Italian monthly unemployment rate expected to remain at 11.9%
  • 8:30 am GMT: U.K. manufacturing PMI (55.1 expected, 54.6 previous)
  • 9:00 am GMT: Euro Zone PPI (0.2% expected, 0.7% previous)
  • 9:00 am GMT: Euro Zone unemployment rate (9.5% expected, 9.6% previous)