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Better-than-expected reports from Australia and China lifted the Aussie and Kiwi. Meanwhile, pre-holiday flows and lower Treasury yields continued to weigh on the Greenback.

  • AU AIG services index up from 59.0 to 63.0 in June
  • U.K. BRC shop price index (y/y) down by 0.5% vs. 1.1% decline in May
  • NZ ANZ commodity prices slips by 1.0% vs. 1.5% increase in May
  • AU retail sales bounces by 0.4% vs. 0.3% growth expected, 0.5% uptick in April
  • AU trade surplus widens from 0.47B AUD to 0.83B AUD in May
  • China’s Caixin services PMI improves from 52.9 to 53.9 in June

Major Events/Reports:

Australia’s data dump

Data from the Land Down Under showed retail sales rising by 0.4% in May, which is higher than the expected 0.3% uptick for the month. Not only that, but April’s growth was also revised higher from 0.4% to 0.5%.

A cooler weather helped boost sales with department stores leading the increase in retail activity. Spending on food and household goods also shot higher, while clothing, footwear, and personal accessories sales also improved.

Meanwhile, a separate report reflected a wider trade surplus in May. Australia had a 0.83B AUD surplus for the month, higher than the downwardly revised 0.47B AUD surplus in April.

Turns out, exports had risen by 4.0% for the month thanks mainly to coal, coke, and briquettes shipments. This offset the 3.0% increase in imports that was led by higher purchases of consumption goods.

Despite the improvement, trade surplus for the first five months of the year still clocked in at 5.52B AUD, much lower than the 8.82B AUD figure seen in the same time frame last year.

China’s Caixin services PMI

A private report printed earlier today pointed to increased activity in the services sector.

China’s Caixin services PMI clocked in at 53.9 in June, which marks the fastest rate in four months. The report is mostly in line with the government’s non-manufacturing PMI, which inched higher from 54.0 to 55.0 for the month.

A closer look showed the employment and new business components rising higher and suggests healthy demand for the sector. However, input costs rising faster than prices charged could soon pose problems for businesses.

Mixed risk sentiment

Recall that Micron Technology Inc sank when a Chinese court temporarily barred it from selling 26 chip products in the mainland. On top of that, the U.S. also moved to block China Mobile from offering services to the country’s telecommunications market.

It seems like the Asian bourses couldn’t get over the trade war risks implied by these headlines.

  • Nikkei is down by 0.42% to 21,694.0
  • A SX 200 is down by 0.29% to 6,187.2
  • Hang Seng is down by 1.07% to 28,239.1
  • Shanghai index is down by 0.68% to 2,767.906

Commodity prices fared a bit better, with gold taking advantage of dollar weakness and crude oil prices taking a breather from its losses in the previous sessions.

  • Gold is up by 0.35% to $1,257.18
  • Brent crude oil is up by 0.53% to $74.58
  • U.S. WTI is up by 0.42% to $78.13

Major Market Mover(s):

AUD

Aussie bulls cheered at Australia’s relatively strong data releases, as well as China’s better-than-expected PMI report.

AUD/USD is up by 18 pips (+0.24%) to .7403; AUD/JPY is up by 11 pips (+0.13%) to 81.77; AUD/CHF is up by 13 pips (+0.18%) to .7342; AUD/CAD is up by 17 pips (+0.17%) to .9720, and EUR/AUD is down by 27 pips (-0.17%) to 1.5754.

NZD

The high-yielding Kiwi went along for the ride and also gained ground against its major counterparts.

NZD/USD is up by 16 pips (+0.24%) to .6770; NZD/CHF is up by 11 pips (+0.17%) to .6714; NZD/CAD is up by 14 pips (+0.16%) to .8889, and NZD/JPY is up by 9 pips (+0.13%) to 74.78.

USD

The Greenback failed to regain momentum as Asian session forex traders caught up to the previous sessions’ dollar-selling party.

USD/JPY is down by 12 pips (-0.11%) to 110.45; EUR/USD is up by 6 pips (+0.05%) to 1.1664; GBP/USD is up by 15 pips (+0.11%) to 1.3204, and USD/CHF is down by 6 pips (-0.06%) to .9917.

Watch Out For:

  • 8:15 am GMT: Spain’s services PMI (56.3 expected, 56.4 previous)
  • 8:45 am GMT: Italy’s services PMI (53.3 expected, 53.1 previous)
  • 8:50 am GMT: France’s final services PMI to remain at 56.4
  • 8:55 am GMT: Germany’s final services PMI expected to maintain 53.9 reading
  • 9:00 am GMT: Euro Zone’s final services PMI estimated to remain at 54.0