- HSBC China manufacturing PMI at 5-month high of 49.7;
- New Zealand job ads +2.6% in April, +15.4% YoY;
- Regional stock markets traded higher by around 1% on average with the Nikkei +2%;
- Japanese demand for foreign bonds reported at 9-month highs.
The AUD was the main mover today and it drove movements in most of the other majors through cross flows.
AUD/USD dipped in early trade, driven mainly by selling from US-based model funds. Despite some healthy gains in regional stock markets, the AUD fell steadily against the USD and the JPY in the lead up to the release of the HSBC PMI data making many suspect that another leak had occurred.
We needn’t have been so suspicious! The data came in at 5-month highs and intraday AUD bears were quickly forced to run for cover. AUD/USD traded up to .9260 from lows near .9220 pre-data and has been inching higher on the crosses for the past 2 hours. Range: .9217/69
AUD/JPY had initially stalled at a 38.2% retracement (95.20-93.00) near 93.85 which encouraged the A$ bears this morning but that level has fallen also post-PMI and the cross has traded to levels near 94.20 after lunch.
USD/JPY has been driven around mainly by AUD/JPY flows. There are reportedly some decent-sized stops above 101.70 which are coming into view after the Nikkei rose to a daily high just after Tokyo-lunch. Range: 101.32/66
EUR/USD has been similar to USD/JPY, totally at mercy of flows in AUD crosses. Bids reported earlier at 1.3670/73 are holding firm thus far. The market is heavily focusing on the 200-dma at 1.3635 and a daily close below is expected to swing market sentiment decisively. Range: 1.3670/85.
The GBP, CAD and NZD have all been relatively quiet with few flows reported. EUR/GBP barriers are reported at .8050 and USD/CAD sell orders are heavy at 1.0940.
