Forex today was a quiet Asian affair amid holiday-thinned trading, with Japan and China both out on their respective public holidays. Despite a holiday, the China Federation of Logistics & Purchasing’s (CFLP) published upbeat China manufacturing and non-manufacturing PMI readings. But, better Chinese PMIs failed to benefit the Antipodeans, as they were dragged lower by negative oil and gold prices. The Loonie too tracked its commodity-linked peers lower. For rest of the majors, tight trading ranges remained the theme this session amid broad-based USD consolidation, as investors brace for the FOMC and NFP week ahead.
Main topics in Asia
Japan to tighten FX leverage - Japan press
According to reporting by Japan's Sankei newspaper, Japan's Financial Services Authority intends to restrict FX leverage on retail accounts.
Chinese data dump: NBS/Non-manufacturing PMI April solid
The Chinese, who are out on Labour day, just reported the latest NBS manufacturing data that came in as 51.4.
New Zealand ANZ Activity Outlook down to 17.8% in April from previous 21.8%
Australia: Private credit expanding at a modest pace - Westpac
Australian credit to the private sector is expanding at a modest pace as credit grew by 0.5% in March, following a 0.4% gain in February and below par outcomes of 0.3% in both December and January, points out Andrew Hanlan, Research Analyst at Westpac.
Trump threatens September shutdown if wall not funded - Reuters
The US President Trump is repeating his brinkmanship points from the last US funding bill showdown, looking ahead to September's budget meeting and warning that he demands funding for his planned US-Mexico border wall …
Fitch: Housing market downturn to weigh down on Australian banks' ratings
Fitch Ratings is out with its latest review report on the Australian banking sector, underscoring key risks that could pressure the Australian banks’ ratings.
Key Focus ahead
Today’s EU calendar sees a quiet start to a busy week ahead, with Germany’s retail sales and prelim CPI data to keep the EUR, GBP traders slightly motivated amid an empty UK docket. Also, in focus will be the speech by the Reserve Bank of Australia (RBA) Governor Phillip Lowe at the Reserve Bank Board Dinner, in Adelaide.
In the NA session, the Canadian RMPI (Change in the price of raw materials purchased by manufacturers) will be reported alongside the US Core PCE price index and personal spending figures. Meanwhile, the US Chicago PMI and pending home sales data will be reported just ahead of the US open.
EUR/USD: steady above 1.2100 ahead of a Big week
The EUR/USD pair kicked-off the week on a quiet note, as holiday-thinned markets left the rates fluctuating between gains and losses well above the 1.21 handle, as investors await fresh impetus from the sentiment on the European open ahead of the German Prelim CPI release.
GBP/USD back into familiar territory below 1.38
A new week begins with the Sterling having fallen over four percent since April's high of 1.4375. Monday's European session is a decidedly quiet affair for the GBP with nothing scheduled on the economic calendar, but the GBP's recent rout is a warning sign …
Tariffs to return to the forefront as May 1st deadline approaches
The focus is likely to swing back to US President Trump's steel and aluminum tariffs this week, as the exemptions granted to several key trading partners with the US were only temporary, with a self-imposed deadline of May 1st by Trump.
RBA Board Meeting Tuesday and Statement of Monetary Policy on Friday
The week ahead could be a really busy one in terms of local and international news. The first Tuesday of the month, of course, brings an RBA Board Meeting, with Governor Phil ‘slow and gradual’ Lowe speaking afterward at a dinner in Adelaide.
The week ahead: eyes on nonfarm payrolls - Nomura
“We expect nonfarm payroll employment to increase by 220k in April following a weather-depressed 103k increase in March.”
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EUR/USD treads water just above 1.0400 post-US data
Another sign of the good health of the US economy came in response to firm flash US Manufacturing and Services PMIs, which in turn reinforced further the already strong performance of the US Dollar, relegating EUR/USD to the 1.0400 neighbourhood on Friday.
GBP/USD remains depressed near 1.2520 on stronger Dollar
Poor results from the UK docket kept the British pound on the back foot on Thursday, hovering around the low-1.2500s in a context of generalized weakness in the risk-linked galaxy vs. another outstanding day in the Greenback.
Gold keeps the bid bias unchanged near $2,700
Persistent safe haven demand continues to prop up the march north in Gold prices so far on Friday, hitting new two-week tops past the key $2,700 mark per troy ounce despite extra strength in the Greenback and mixed US yields.
Geopolitics back on the radar
Rising tensions between Russia and Ukraine caused renewed unease in the markets this week. Putin signed an amendment to Russian nuclear doctrine, which allows Russia to use nuclear weapons for retaliating against strikes carried out with conventional weapons.
Eurozone PMI sounds the alarm about growth once more
The composite PMI dropped from 50 to 48.1, once more stressing growth concerns for the eurozone. Hard data has actually come in better than expected recently – so ahead of the December meeting, the ECB has to figure out whether this is the PMI crying wolf or whether it should take this signal seriously. We think it’s the latter.
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