Article Highlights

  • NZ ANZ consumer confidence at 7-year high in January
  • AU MI inflation expectations at 2.3% vs. 2.1% in December
  • China HSBC flash manufacturing PMI unexpectedly contracts to a 6-month low
  • Risk aversion, IMF’s Shinohara, boosts the yen
  • Nikkei closes down 0.79% at 15,695.89
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What a day for Asian currencies! The Aussie and Kiwi found support from a better-than-expected Australian inflation report early in the session but lost nearly all of its intraweek gains when China’s HSBC flash PMI report unexpectedly contracted.

The report clocked in at 49.6 when analysts had been expecting an expansionary figure of 50.3. Market players say that “cooling domestic demand conditions” as well as factories closing ahead of the Spring Holidays weighed on the report. AUD/USD is back below .8800 while NZD/USD found resistance at .8300.

The low-yielding yen was also taken for a ride, this time on the green side of the charts. Big players had been pushing USD/JPY higher early in the session before China’s weak PMI data weighed on risk appetite and dragged yen crosses across the board. Of course, it also helped that IMF Deputy Managing Director Naoyuki Shinohara said that there’s no need for the BOJ to add more stimulus as long as there’s progress being made.

Let’s see if the European markets can top the Asian session volatility. Services and manufacturing PMI numbers from France, Germany, and the euro zone are but minutes away from release and analysts generally expect to see higher numbers last month. Then, at 12:00 pm GMT we’ll see CBI realized sales from the U.K., which is expected to drop to 25 from last month’s 34 index reading.

See also:

U.S. Session Recap

Bonnie and Clyde, peanut butter and jelly, Justin Bieber and his hair. Some things just go well together.

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