- US ISM manufacturing PMI at 51.3 vs. 56 expected
- US construction spending up by 0.1% vs. 0.8% previous
- S&P 500 down 2.3%
- RBA interest rate decision on tap
Risk aversion continued to dominate the markets during the U.S. session as yen crosses continued their descent. The US ISM manufacturing data missed its estimates by a mile and dropped to a seven-month low thanks in part to new orders falling at its sharpest rate in 33 years. Unfavorable weather was also cited, although it doesn’t account for the entire slowdown.
Not surprisingly, the report weighed on the Greenback as it added to concerns that the Fed might be tapering too fast too soon. EUR/USD, also lifted by upside data surprises, easily retested 1.3500. GBP/USD stalled at the 1.6300 support while USD/JPY and USD/CHF both saw further declines.
Will the weak reports from the U.S. and China continue to dictate risk sentiment today? The RBA’s interest rate decision in three hours is the only showstopper scheduled during the Asian session so you might want to consider looking at the Aussie pairs for trades. Also keep your eyes peeled for any significant Nikkei price action in case we see any sentiment-changing event!
Bonnie and Clyde, peanut butter and jelly, Justin Bieber and his hair. Some things just go well together.
Head on to Big Pippin’s Daily Chart Art for some pip-locking technical setups!