- New Zealand Westpac-McDermott employee confidence index edged up to 98.9 from 96.2.
- U.K. Hometrack September housing prices fell 0.5% y/y and 0.1% m/m
- Australia AiG performance manufacturing index fell to 44.1 in September from 45.3 in August.
- Australia MI inflation gauge rose 0.2% m/m, rose 2.4% y/y.
- Japan 3rd qtr Tankan, large manufacturer -3, non-manufacturer 8. Sentiment down, outlook cautious.
- China official manufacturing PMI at 49.8 vs forecast of 50.1 but above August PMI of 49.2.
- PM Noda to name former senior ruling party official Jojima as finance minister.
The Asian session was mostly ‘risk off’ as the dollar and yen continued to strengthen against their counterparts. Spain and Greece are still making headlines, along with repeated concerns over slowing global economic growth. Both the ‘Tankan’ and China PMI came out slightly better than forecast but are still showing weakness in their economies.
EUR/USD fell victim to the usual debt crisis worries, and a market search for stops below the support level at 1.2820. It’s found some bounce off the session low 1.2802, which if broken would target next support level at 1.2750.
USD/JPY paid very little attention to the ‘Tankan’, trading in a narrow range of 78.03 high, 77.85 low. Some support on the lows of 77.80/85, some resistance above at 78.15 through to 78.30 with scattered stops mixed in.
AUD/USD followed EUR/USD lower and continued soft most of the session. Support down around 1.0320 trying to get some sort of a bounce to maintain a 1.0300 handle. The RBA rate decision tomorrow has market looking for a possible 25bp cut, but most feel they will leave it unchanged and will now wait until November/December to make any necessary cuts.
Have a good day.
