AUD looks to Chinese Manufacturing data for stimulus

Australian Dollar:

The Australian Dollar starts higher today despite an unfavourable report being released locally showing a dramatic decrease in the number of building approvals for the month of August. The announcement highlighted a reduction of 6.9% in approvals issued, which fell notably short of the expectation of a 1.8% drop. Following this report the RBA also released a positive statement showing that the total value of new credit issued to consumers/businesses for the same month surpassed expectations and increased by 0.6%. The Aussie continued to trend upwards overnight to reach highs of AUD/USD 0.7038, and opens today at 0.7014. Focus today will be on high impact Chinese manufacturing data scheduled for release in the afternoon.

• We expect a range today of AUD/USD 0.6980 – 0.7060

New Zealand Dollar:

The Kiwi has rallied overnight due to a positive local announcement by ANZ regarding business confidence. The reading itself was a vast improvement on last month, and this leading indicator of economic health points to an encouraging change in the sentiment of domestic businesses. The NZD/USD yesterday kept within a range of 0.6332 and 0.6407, and commences trade today buying 63.96 US cents. With no local announcements scheduled for Thursday trader attention will be on manufacturing figures being released out of China later in the day.

Great British Pound:

The Cable has opened noticeably weaker today at 1.5126 as consumer confidence falls more than expected for the month of September. The combination of a global economic slowdown, as well as the migration crisis in Europe have unfortunately taken its toll on the local currency. The GBP/USD initially rallied off the back of promising current account figures showing a reduction in the account deficit, however the currency pair eventually sunk back down through trade to reach lows of GBP/USD 1.5114. Local manufacturing PMI figures will be monitored closely later today as speculators attempt to create an accurate picture on the current health of the economy.

• We expect a range today of GBP/AUD 2.1510 – 2.1590

Majors:

Once again weak economic data released out of the Eurozone has resulted in the EUR/USD starting the day’s trade lower than the previous day. Among the data sets announced the main player in the Eurozone, Germany, reported retail sales figures under forecast for the previous month, as well as soft employment change numbers. With inflation and unemployment both also revealed as under forecast it is clear that the economic situation is quite unfavourable, and may perhaps lead to speculation for the ECB to implement further stimulus. In the US positive non-farm payroll employment numbers were printed, however as employment is already at levels desired by the Federal Reserve for a rate hike, this will tend to have a muted effect on the Greenback unless it is backed by upbeat wage price/growth reports. The EUR/USD starts today at 1.1175.

Data releases:

• AUD: AIG Manufacturing Index, Commodity Prices y/y
• CAD: RBC Manufacturing PMI
• CHF: Retail Sales y/y, Manufacturing PMI
• CNY: Bank Holiday, Manufacturing PMI, Non-Manufacturing PMI, Caixin Final Manufacturing PMI, Caixin Services PMI
• EUR: Spanish Manufacturing PMI, Italian Manufacturing PMI, French Final Manufacturing PMI, German Final Manufacturing PMI, Final Manufacturing PMI, Spanish 10-y Bond Auction, French 10-y Bond Auction
• GBP: Manufacturing PMI, FPC Meeting Minutes
• JPY: Tanakan Manufacturing Index, Tanakan Non-Manufacturing Index, Final Manufacturing PMI, 10-y Bond Auction
• USD: FOMC Member Brainard Speaks, Challenger Job Cuts y/y, Unemployment Claims, Final Manufacturing PMI, ISM Manufacturing PMI, Construction Spending m/m, ISM Manufacturing Prices, Natural Gas Storage, Total Vehicle Sales, FOMC Member William Speaks