The Eurozone PMIs were generally in line with expectations, boosting the Euro to 1.29 against Dollar. The rebound however did not last that long with the composite PMI announcing a fall to 52.9 – the lowest level this year. The growths of outputs and demands were weak with enterprises continually cutting prices to attract consumers. The result has magnified the concerns of deflation risk in the Eurozone. The bearish trend remains unless the Euro upward breaks yesterday’s high.
The Yen also took this chance to bounce. Dollar Yen once dipped to a four-day low, below 108.30. This can be viewed as partially being a knee-jerk reaction to US airstrikes on Syria boosting the need for safe-havens. The implied skewness from the option market shows that traders are now expecting a deeper retreat of this pair. The possibility is increasing as there has been no significant retreat yet since the Dollar Yen broke the 104 integer level.
The Aussie Dollar climbed to an area around 0.8922 after the upbeat China HSBC Flash Manufacturing PMI was released. However, the pair barely remained at this level with a typical hourly double top pattern and again refreshed the recent low to 0.8840. Economists expect the reasonable level for the Aussie Dollar to be 0.85, considering the lower commodity prices. However, there still is a risk that funds may support the pair beyond this level as the interest rate spread between Australia and Eurozone is further widened.
Asian stocks rose from a four-month low as the preliminary gauge of Chinese manufacturing unexpectedly rose. The Shanghai Composite rebounded 0.87% to 2310. The Nikkei Stock Average fell 0.71%. The Australian ASX 200 bounced 0.98% to 5416. European stock markets fell on a weak report on Europe’s economy, the UK FTSE was down 1.44%, the German DAX lost 1.58% and the French CAC Index slumped 1.87%. U.S. stocks retreated as well. The S&P 500 fell 0.58% to 1983. The Dow edged down 0.68% to 17056, while the Nasdaq Composite Index dipped 0.42 % to 4509.
On the data front, German Ifo Business Climate will be released at 18:00 AEST. U.S. New Home Sales will be at midnight.
Recommended Content
Editors’ Picks
EUR/USD edges lower toward 1.0700 post-US PCE
EUR/USD stays under modest bearish pressure but manages to hold above 1.0700 in the American session on Friday. The US Dollar (USD) gathers strength against its rivals after the stronger-than-forecast PCE inflation data, not allowing the pair to gain traction.
GBP/USD retreats to 1.2500 on renewed USD strength
GBP/USD lost its traction and turned negative on the day near 1.2500. Following the stronger-than-expected PCE inflation readings from the US, the USD stays resilient and makes it difficult for the pair to gather recovery momentum.
Gold struggles to hold above $2,350 following US inflation
Gold turned south and declined toward $2,340, erasing a large portion of its daily gains, as the USD benefited from PCE inflation data. The benchmark 10-year US yield, however, stays in negative territory and helps XAU/USD limit its losses.
Bitcoin Weekly Forecast: BTC’s next breakout could propel it to $80,000 Premium
Bitcoin’s recent price consolidation could be nearing its end as technical indicators and on-chain metrics suggest a potential upward breakout. However, this move would not be straightforward and could punish impatient investors.
Week ahead – Hawkish risk as Fed and NFP on tap, Eurozone data eyed too
Fed meets on Wednesday as US inflation stays elevated. Will Friday’s jobs report bring relief or more angst for the markets? Eurozone flash GDP and CPI numbers in focus for the Euro.