Forex Today: Antipodeans lifted by solid Chinese PMI, focus on UK PMI, US NFP
A sense of calm prevailed across the fx space amid a typical pre-NFP caution trading in Asia this Friday. The US dollar remained broadly lower, still hit by the FOMC follow-through, despite the bounce in the Treasury yields that dragged Gold lower from weekly tops.
The Antipodeans once again outperformed after the Chinese Caixin Manufacturing PMI data showed a big beat on the expectations with a 51.7 figure in October. Although the upside remained limited by re-emergence of US-China trade concerns. The Aussie consolidated the data-led spike above the 0.69 handle while the Kiwi eased-off daily tops of 0.6442 but still remained well bid above the 0.6400 level. The USD/JPY pair bounced-off lows and recovered to the 108 handle, tracking the rise in the Wall Street futures and Treasury yields. The Canadian dollar continues to find some support from the modest gains seen in oil prices while the Swissie traded modestly flat ahead of the Swiss Retail Sales report.
Heading into Europe, both the European currencies, the EUR/USD and Cable are trading with mild gains. The Fiber’s upside still remains capped below 1.1170/75 levels while GBP/USD holds above the 1.2950 barrier ahead of the UK Manufacturing PMI release.
Main Topics in Asia
US Pres. Trump: UK Labour leader Corbyn would be 'so bad' for Britain
N. Korea says it successfully test-fired super-large multiple rocket launcher – Yonhap
US imposes further sanctions on Iran, relating to construction/missile program
Japan finmin Aso: Not considering need to compile economic stimulus measures now
BOJ offers to buy JPY 380 bln worth of JGBs
Caixin Manufacturing PMI: 51.7 vs expectations of 51, AUD/USD firms
USD/IDR stays firmer as Indonesia's annualized CPI misses estimates with 3.13%
Key Focus Ahead
We have another busy day ahead, in term of the economic calendar, with plenty of key event risks ahead while markets await fresh updates on the US-China trade issue. Recall that the leading negotiators from both the US and China are likely to hold a telephonic conversation on trade later today. Meanwhile, any fresh Brexit/ UK political headlines will also grab some eyeballs, with all eyes set on the December 12 polls.
On the macro data front, the EUR calendar is relatively light, with the Swiss Retail Sales data due on the cards at 0730 GMT alongside other minority reports from Switzerland. However, the UK Manufacturing PMI, due at 0930 GMT will headline. In the NA session, the main focus will be on US Nonfarm Payrolls along with the jobless rate and hourly wage growth data, all to be released at once at 1230 GMT. Also, the US Manufacturing sector activity reports from both Markit as well as ISM will be eyed around 1400 GMT. The US economic news will offer fresh hints on whether the Fed will resort to another rate cut in December.
Later in the American mid-morning, we have a slew of US Federal Reserve (Fed) officials scheduled to speak, including Williams, Clarida and Quarles. At 1700 GMT, oil traders will look forward to the Baker Hughes US Oil Rig Count data.
EUR/USD: Market turns indecisive ahead of US Nonfarm Payrolls
The EUR/USD market seems to have turned indecisive ahead of the all-important US Nonfarm Payrolls report, which is expected to show the job growth slowed in October due to the General Motors strike. The spot could drop below key support at 1.1131 if the US wage growth numbers blow past expectations.
GBP/USD holds on to recovery gains ahead of UK PMI, US NFP
GBP/USD keeps the bids amid UK political optimism, greenback weakness. US-China trade story keeps risk sentiment dwindled ahead of the key data. Fedspeak and the US ISM Manufacturing PMI add to the catalysts.
US Non-Farm Payrolls Preview: The trend remains the same
October payrolls are expected to fall on General Motors strike. ADP jobs of 125,000 in October were at the three-month trend. Consumer economy and sentiment remain strong backed by labor market.
US October Manufacturing PMI Preview: Waiting for the China deal
Modest rebound in sentiment forecast but index will remain in contraction. The unsigned phase one trade deal with China has had a little positive effect as yet. Export orders in September were the weakest since the recession.
Author
Dhwani Mehta
FXStreet
Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.
