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The Aussie got a bearish kick when Australia’s CAPEX failed to meet expectations. And not even the risk-on vibes and better-than-expected Chinese PMI numbers were able to stop the bears from mauling the Aussie.

The pound, meanwhile, was nudged broadly higher to the top spot. No clear reason why, though.

  • Japan’s preliminary industrial production (m/m): 0.3% vs. 1.5% expected, 1.4% previous
  • Chinese manufacturing PMI: 51.9 vs. 51.4 expected, same as previous
  • Chinese non-manufacturing PMI: 54.9 vs. 54.8 expected, same as previous
  • ANZ’s New Zealand business confidence: -27.2 vs. -23.4 previous
  • Australia’s private capital expenditure (q/q): 0.4% vs. 1.0% expected, 0.2% previous
  • Australia’s private sector credit (m/m): 0.4% as expected vs. 0.5% previous
  • Japanese housing starts (y/y): 0.3% vs. -8.8% expected vs. -8.3% previous

Major Events/Reports:

Australia’s CAPEX disappoints

Australia’s quarterly private capital expenditure report printed a 0.4% increase in Q1 2018.

This is stronger compared to Q4 2017’s upwardly revised 0.2% rise (-0.2% originally). Even so, the reading is a disappointment because the market was expecting a much stronger 1.0% increase.

A quick read of the report shows that the weakness came from the 1.3% drop in investments on building and structures. This marks the second quarter of declines.

And unlike last quarter when the mining sector was the drag, it was the manufacturing sector that took a hit in Q1.

Official Chinese PMI

The National Bureau of Statistics released the Chinese government’s official PMI numbers earlier and they both managed to beat expectations.

To be more specific, China’s official manufacturing PMI came in at 51.9, which is great because the consensus is that it would hold steady at 51.4.

China’s official non-manufacturing PMI, meanwhile, ticked higher to 54.9 instead of remaining unchanged at 54.8 as expected.

Risk-taking in Asia-Pacific

Equity indices from the Asia-Pacific region were broadly in the green today. And according to market analysts, the risk-friendly vibes were due to China’s better-than-expected PMI numbers and risk sentiment spillover from the earlier session, namely relief that the political uncertainty in Italy seems to be easing.

  • Australia’s ASX 200 was up by 0.44% to 6,011.00
  • New Zealand’s NZX 50 was up by 0.40% to 8,682.76
  • The Shanghai Composite was down by 1.33% to 3,081.60
  • Hang Seng was up by 0.78% to 30,290.00
  • The Nikkei Index was up by 0.77% to 22,188.50
  • KOSPI was up by 0.47% to 2,419.83

Major Market Mover(s):

AUD

The Aussie was steady for most of the session. The Aussie did get kicked broadly lower when Australia’s CAPEX mixed expectations by a wide margin, though. And that bearish kick is the reason why the Aussie is the worst-performing currency of the Asian session.

AUD/USD was down by 16 pips (-0.21%) to 0.7560, AUD/JPY was down by 30 pips (-0.37%) to 82.20, AUD/CAD was down by 27 pips (-0.28%) to 0.9729

GBP

There was notable demand for the pound during the Asian session, which is rather wonky since there were no direct catalysts for the pound.

Some pound pairs have been getting bids without apparent catalysts since yesterday, though. And market analysts have been suggesting that the pound may be on the rise because of preemptive positioning ahead of this Friday’s U.K. manufacturing PMI report.

GBP/USD was up by 17 pips (+0.13%) to 1.3300, GBP/AUD was up by 64 pips (+0.36%) to 1.7594, GBP/NZD was up by 31 pips (+0.16%) to 1.9048

Watch Out For:

  • 5:45 pm GMT: Swiss GDP (0.5% expected, 0.6% previous)
  • 6:00 pm GMT: Nationwide’s U.K. HPI (0.2% expected, same as previous)
  • 6:45 pm GMT: French preliminary HICP (0.3% expected, 0.2% previous)
  • 7:15 pm GMT: Swiss retail sales (-1.4% expected, -1.8% previous)
  • 8:00 pm GMT: Italian jobless rate (10.9% expected, 11.0% previous)
  • 8:30 pm GMT: U.K. net lending to individuals (£5.2B expected, £4.2B previous)
  • 8:30 pm GMT: U.K. mortgage approvals (63.5K expected, 62.9K previous)
  • 9:00 pm GMT: Euro Zone flash HICP (1.6% expected, 1.2% previous) and flash core HICP (1.0% expected, 0.7% previous)
  • 9:00 pm GMT: Euro Zone jobless rate (8.4% expected, 8.5% previous)