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Not a lot of major data on the docket today, although we did see PMI reports from Japan, China, and Australia, as well as a bit of action for the yen.

  • Australia’s AIG manufacturing index up from 56.2 to 58.7
  • Australia’s building approvals drops by 20.0% vs. 7.9% decline expected, 12.6% previous
  • Australia’s import prices (q/q) up by 2.0% vs. 1.5% expected, -1.6% previous
  • Japan’s final manufacturing PMI upgraded from 54.4 to 54.8 in January
  • China’s Caixin manufacturing PMI retains 51.5 reading as expected
  • Australia’s commodity prices (y/y) down by 0.6% vs. 6.0% decline in December

Major Events/Reports:

PMI party

Earlier today we saw official and private PMI readings from Japan, China, and Australia.

Japan upgraded its January reading for its manufacturing PMI from 54.4 to 54.8, which marks the highest levels since February 2014. A closer look tells us that new business opportunities shot up to its fastest rate in four years, while improvements in output and labour growth also helped support overall confidence.

Meanwhile, China’s Caixin manufacturing PMI report – a report that focuses on smaller businesses in China – was steady at its 13-month high reading of 51.5 in January.

Apparently, increases in new export sales and total new work had supported the report’s overall growth. The official reading – which focuses on bigger businesses – missed expectations earlier this week with a 51.3 reading.

Last but not the least is Australia’s AIG manufacturing PMI, which registered at 58.7 in January and marked its 16th month of expansion. Six out of seven indices showed improvement for the month, though it was the employment sub-index that slipped a smidge.

Mixed risk sentiment

The Fed’s upbeat statement encouraged a few bulls to come out and play, but Chinese markets failed to participate on the back of mixed equities performances.

  • Nikkei is up by 1.17% to 23,367.5;
  • Australia’s A SX 200 is up by 0.93% to 6,071.5;
  • Hang Seng is down by 0.44% to 32,743.8, and
  • Shanghai index is down by 1.11% to 3,442.207.

Commodity prices weren’t any clearer. Dollar strength dragged gold prices lower, but oil recovered some points from its selloff from the previous trading session.

  • Gold is down by 0.04% to $1,344.02;
  • Brent crude oil is down by 0.17% to $68.99, and
  • U.S. WTI is up by 0.09% to $64.81.

Major Market Mover(s):

AUD

The lack of positive reaction to China’s Caixin PMI and a surprisingly weak building approvals release in Australia weighed on the Aussie for most of the session.

AUD/NZD is down by 12 pips (-0.11%) to 1.0923;
AUD/USD is down by 6 pips (-0.07%) to .8049;
EUR/AUD is up by 27 pips (+0.18%) to 1.5435, and
GBP/AUD is up by 26 pips (+0.15%) to 1.7637.

JPY

The yen failed to find support from a one-two punch of stronger-than-expected Japanese PMI data and higher JGB yields during the session. One possible reason is the 10-year JGB auction, which still attracted decent demand and underscored BOJ’s commitment to its easy monetary policies.

USD/JPY is up by 14 pips (+0.13%) to 109.33;
EUR/JPY is up by 29 pips (+0.22%) to 135.82;
GBP/JPY is up by 27 pips (+0.17%) to 155.19, and
NZD/JPY is up by 17 pips (+0.21%) to 80.55.

Watch Out For:

  • 7:00 am GMT: U.K.’s Nationwide house price index (0.2% expected, 0.6% previous)
  • 8:15 am GMT: Switzerland’s retail sales (y/y) (1.5% expected, -0.2% previous)
  • 8:15 am GMT: Spain’s manufacturing PMI (55.7 expected, 55.8 previous)
  • 8:30 am GMT: Switzerland’s manufacturing PMI (64.1 expected, 65.2 previous)
  • 8:45 am GMT: Italy’s manufacturing PMI (57.7 expected, 57.4 previous)
  • 8:50 am GMT: France’s final manufacturing PMI to remain at 58.1?
  • 8:55 am GMT: German final manufacturing PMI to keep its 61.2 reading?
  • 9:00 am GMT: Euro Zone’s final manufacturing PMI expected to remain at 59.6
  • 9:30 am GMT: U.K.’s manufacturing PMI (56.5 expected, 56.3 previous)