Article Highlights

  • Canadian markets out on Civic Day holiday
  • US personal income: 0.4% vs. 0.3% expected, 0.4% previous
  • US personal spending: 0.2% as expected vs. 0.7% previous
  • US core PCE price index: 0.1% as expected and previous
  • US construction spending: 0.1% vs. 0.6% expected, 1.8% previous
  • US ISM manufacturing PMI leaked: 52.7 vs. 53.5 expected and previous
  • US manufacturing PMI: 53.8 as expected and previous
  • Commodity prices edge lower
  • RBA’s monetary policy decision due today
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Forex price action was as exciting as watching water boil despite the onslaught of data from Uncle Sam. What gives?!

One possible explanation is the mixed nature of yesterday’s U.S. reports. For starters, personal income and spending went up and construction spending posted its smallest uptick in five months while the leaked ISM manufacturing PMI surprised markets with its three-month low reading. Last but not the least, the Markit manufacturing report came out flat. Talk about sending mixed signals!

Most of the Greenback’s counterparts gained a couple of pips at the surprise release of the ISM manufacturing PMI, but the dollar bulls soon went back in the game and erased most of the low-yielding currency’s losses.

EUR/USD ended the session 10 pips lower (-0.09%) than its open price while USD/JPY found resistance at 124.25 and closed at 123.97. Even USD/CHF showed limited gains with its 12-pip trip (+0.12%) to .9696 while GBP/USD ticked 15 pips higher (+0.10%) to 1.5583.

The comdolls were also given reprieves from volatility despite another round of commodity-selling in the markets. Weak data from China and Fed tightening expectations drove gold prices down by another 0.5% to $1,089.40 per troy ounce. Meanwhile, Brent crude oil closed below $50 per barrel and WTI crude sank by another 3.9% to a five-month low of $45.39 per barrel. Yikes!

Surprisingly, the comdolls managed to limit their losses, at least against the Greenback. AUD/USD ended the session 11 pips higher (+0.15%) at .7276 while NZD/USD only lost 16 pips (-0.24%) to .6575 and USD/CAD only inched 4 pips higher (+0.03%) to 1.3157.

Will Asian session forex traders be as considerate on the comdolls today? Australia is set to release some potentially heavy hitters including the trade balance and retail sales reports at 1:30 am GMT. Then, at 4:30 am GMT we’re expecting the RBA to print its monetary policy decision. Market players are expecting Australia’s trade deficit to widen from 2.75billion AUD to 3 billion AUD in June while retail sales is expected to grow by 0.4% against last month’s reading.

We probably won’t see any real action from the Aussie until the RBA joins the party though. In its last statement the central bank avoided mentioning how threatening China’s market moves are to the economy. Now that the issue is more pressing and has significantly affected the Aussie’s price action of late, we might see hear some remarks from the RBA. Watch out for any hints of more easing from the central bank!

See also:

London Session Recap

Bonnie and Clyde, peanut butter and jelly, Kanye West and Kanye West. Some things just go well together.

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