Forex Afternoon Wrap – 03/08

Markets open to a busy Monday!

Key Notes:

• Australia AIG manufacturing Index 50.4 vs. 44.2 previously
• Australia MI inflation gauge m/m 0.2% vs. 0.1%
• Australia HIA new home sales m/m 0.5% vs. -2.3% previously
• ANZ Job advertisements m/m -0.4% vs. 1.2% previously
• Japan Final manufacturing PMI 51.2 vs. 51.4
• China Final manufacturing PMI 47.8 vs. 48.3
• Spain manufacturing PMI 53.6 vs. 54.2
• Switzerland manufacturing PMI 48.7 vs. 50.6
• Italy manufacturing PMI 55.3 vs. 54.6
• France manufacturing PMI 49.6 vs. 49.6
• German final manufacturing PMI 51.8 vs. 51.5
• Eurozone final manufacturing PMI 51.9 vs. 51.6
• UK manufacturing PMMI 51.9 vs. 51.6
• US Core PCE Price Index m/m 0.1% vs. 0.1%; Personal spending m/m 0.2% vs. 0.2%; Personal income m/m 0.4% vs. 0.4%

Later

• Final manufacturing PMI
• ISM manufacturing PMI
• Construction spending
• ISM manufacturing prices
• FOMC member Powell speech

The currency markets opened the first trading day of the month with a lot of economic data since the Asian trading session. Australia’s manufacturing index grew to 50.4, up from 44.2 while the Melbourne institute inflation gauge also picked up, rising 0.2%, up from 0.1% previously. Home sales also stabilized albeit growing at a soft pace of 0.5%, up from -2.3% decline seen last month. On the jobs front, ANZ job advertisements fell -0.4% for the month. The Aussie opened on a weaker note, falling from the highs near 0.73155 to post a daily low to 0.7266 before stabilizing. For the day, the Aussie was down -0.3% against the Greenback.

The Japanese Yen, which strengthened late Friday, gave up its gains as USDJPY managed to post a strong rally. USDJPY opened the day above 123.88 to post session highs to 123.28, gaining 0.2% for the day, ahead of more US economic data later in the evening. From Japan, the only economic indicator released today was the final manufacturing PMI which was soft at 51.2.

From Europe, a lot of manufacturing PMI data across various Eurozone economies was released today. Overall, the Eurozone final manufacturing PMI came out at 51.9, beating estimates of 51.6. The Euro was however mostly subdued today as the currency was trading inside Friday’s range and remains mostly flat for today at the time of writing.

UK’s manufacturing PMI was soft printing at 51.9 and modestly beating estimates of 51.6. The Pound Sterling was however unchanged on the data but fell from session highs above 1.5635 to trade near daily lows of 1.55745, losing close to -0.15% for the day. GBPUSD remains range bound from Friday’s price action.

Crude Oil prices remained under pressure since the open, shedding close to -1.69% for the day. The decline posts a third straight day of losses as Iran prepares to tie up the loose ends regarding the nuclear deal negotiations which will see the country start to export its crude oil reserves.

The US trading session today saw the release of the Core PCE, which managed to meet estimates, rising 0.1% for the month. Personal income and spending were also in line with estimates and the US Dollar Index was largely muted to the news.

Later in the evening, the US ISM manufacturing data is due for release, which is likely to be a major market mover today. However, should the remainder of the data come in line with estimates, the currency markets are likely to continue the sideways price action as the week moves on.