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2 Mar 2015
What's next: EU CPIs, UK PMI eyed; AUD offered ahead of RBA
FXStreet (Bali) - Find below a comprehensive wrap-up of the latest headlines from Monday in Asia, the main themes dominating FX trading during the Far-East session, and what to expect in the next European session.
Main headlines in Asia
PBOC easing cycle continues, cuts rate again
Australia's AIG PMI shows third month of contraction
Flash China Manufacturing PMI beat flash estimates in February
China Non-manufacturing PMI: 53.9 (February) vs 53.7
Dominating themes from Monday Asia - centered on JPY, AUD, NZD
The Australian Dollar was the weakest currency at the start of the week, as leveraged names begin to discount the expected negative sentiment about to hit the Australian Dollar on Tuesday, should market predictions come true, and the RBA confirm a back-to-back rate cut of 25bp to 2% on Tuesday. AUD/USD saw its lowest at 0.7761, where profit taking was observed, with the rate heading into Europe towards a liquidity area of resistance circa 0.7780/85. NZD traded weaker in sync with the Aussie.
The Japanese Yen saw an early push down across the board in thin Asia, although with Tokyo online, a 2-way money battle ahead of 120.00 took place, with offers initally absorbing the bid tone for a consolidation around 119.80/85. The Nikkei 225 in Japan saw subdued activity, trading around 0.20% higher, failing to stimulate a direction for the Yen, which appears to finally very close from breaking the important 120.00.
Heading into Monday Europe - centered on EUR, GBP
In Europe today, the main focus of interest will be on the latest Euro-area CPI estimate for February. According to Brian Daingerfield, FX Trading Strategist at RBS: "The upside surprise in the German HICP inflation measure released on Friday likely boosts expectations for the region-wide inflation reading." Revisions to February PMI data in varies European countries are released as well.
In the UK, there is a top-tier risk event that needs to be monitored for the interest of GBP traders, that is, the UK Manufacturing PMI, due at 9.30 GMT. There are other low risk economic indicators to monitor, including money supply credit spending and net lending.
According to Jacqui Douglas, Senior Global Strategis at TDS: "With the Eurozone manufacturing PMI having hit its highest level since July 2014, we look for the UK PMI to gain further ground as well with a 0.6pt rise to 53.6 in Feb, which would also be its highest level in the same period." Douglas adds that "The Jan survey showed rising output and new orders, with the first meaningful improvement in new export orders for 5 months, so that should feed through to continued better output growth in Feb."
With regards to the technical stance in both the EUR and GBP, while the former remains vulnerable to further declines following last week's range breakout, which now exposes 1.11 and beyond, the British Pound remains quite combatant, with specs having recently reduced bets against GBP significantly.
Main headlines in Asia
PBOC easing cycle continues, cuts rate again
Australia's AIG PMI shows third month of contraction
Flash China Manufacturing PMI beat flash estimates in February
China Non-manufacturing PMI: 53.9 (February) vs 53.7
Dominating themes from Monday Asia - centered on JPY, AUD, NZD
The Australian Dollar was the weakest currency at the start of the week, as leveraged names begin to discount the expected negative sentiment about to hit the Australian Dollar on Tuesday, should market predictions come true, and the RBA confirm a back-to-back rate cut of 25bp to 2% on Tuesday. AUD/USD saw its lowest at 0.7761, where profit taking was observed, with the rate heading into Europe towards a liquidity area of resistance circa 0.7780/85. NZD traded weaker in sync with the Aussie.
The Japanese Yen saw an early push down across the board in thin Asia, although with Tokyo online, a 2-way money battle ahead of 120.00 took place, with offers initally absorbing the bid tone for a consolidation around 119.80/85. The Nikkei 225 in Japan saw subdued activity, trading around 0.20% higher, failing to stimulate a direction for the Yen, which appears to finally very close from breaking the important 120.00.
Heading into Monday Europe - centered on EUR, GBP
In Europe today, the main focus of interest will be on the latest Euro-area CPI estimate for February. According to Brian Daingerfield, FX Trading Strategist at RBS: "The upside surprise in the German HICP inflation measure released on Friday likely boosts expectations for the region-wide inflation reading." Revisions to February PMI data in varies European countries are released as well.
In the UK, there is a top-tier risk event that needs to be monitored for the interest of GBP traders, that is, the UK Manufacturing PMI, due at 9.30 GMT. There are other low risk economic indicators to monitor, including money supply credit spending and net lending.
According to Jacqui Douglas, Senior Global Strategis at TDS: "With the Eurozone manufacturing PMI having hit its highest level since July 2014, we look for the UK PMI to gain further ground as well with a 0.6pt rise to 53.6 in Feb, which would also be its highest level in the same period." Douglas adds that "The Jan survey showed rising output and new orders, with the first meaningful improvement in new export orders for 5 months, so that should feed through to continued better output growth in Feb."
With regards to the technical stance in both the EUR and GBP, while the former remains vulnerable to further declines following last week's range breakout, which now exposes 1.11 and beyond, the British Pound remains quite combatant, with specs having recently reduced bets against GBP significantly.