Forex trading headlines 1 July 2014
(FYI – Even though some of the lines below are in black they are still clickable links)
The Good
- June Japan vehicle sales -0.7% vs -5.6% prior y/y
- RBA leaves interest rates unchanged at 2.5%
- June 2014 UK Markit/CIPS manufacturing PMI 57.5 vs 56.8 exp
- May 2014 eurozone unemployment rate 11.6% vs 11.7% exp
- June 2014 Spain Markit manufacturing PMI 54.6 vs 53.0 exp
- June Swiss SVME manufacturing PMI 54 vs 52.3 exp
The Bad
- May 2014 German ILO employment +21k SA
- June 2014 German unemployment change SA +9k vs-10k exp
- May 2014 Italian unemployment 12.6% vs 12.6% exp
- European manufacturing PMI’s – The story so far
- June 2014 Italian Markit/ADACI manufacturing PMI 52.6 vs 53.2 exp
- June 2014 French Markit manufacturing PMI 48.2 vs 47.8 exp
- June 2014 German Markit/BME manufacturing PMI 52.0 vs 52.4 exp
- June 2014 eurozone Markit manufacturing PMI final 51.8 vs 51.9 exp
And the Ugly
- ECB’s Nowotny says problematic EU bail in rules are stricter than in US
- BOE FPC says it will continue to monitor housing market closely
- ECB instruments are not the solution to Europe’s economic woes says Schaeuble
We kicked off the session with the RBA rate announcement and there was some hesitancy to wait to see if the statement had a dovish slant. It didn’t and AUD/USD took off through 0.9450. It was more relief buying than anything in the statement and the jawboning of the currency continues to lose its bite. The 0.9470 highs were too much too soon and we drifted back down. The bulls haven’t given up yet but inspiration is going to have to come from elsewhere if we are to see the highs taken out.
It was manufacturing day in Europe and if anyone had any expectations of some bumper data they were disappointed.
Spain surprised with some good numbers and the Swiss had a good headline but some poor components. A small plus was that France was less useless than it had been recently and might even move into expansion sometime this century.
The rest of the data followed the recent theme that it’s still going to be a long hard slog for the euro area to get back on the growth wagon. One tiny chink of light was eurozone unemployment which ticked lower. Italy still remains in unemployment doodoo at 12.6%
The numbers were a pretty mixed bag all said, and EUR/USD traded accordingly. We had an early slide to 1.3680 but it was soon soaked up and a attempt on 1.3700 was made. Heavy offers and a barrier are doing the job so far but the buyers have got the euro bit between their teeth and are not willing to give it up just yet.
The Nikkei had a good day following the Tankan report. The underlying numbers weren’t great but the business investment data was and USD/JPY partied all the way from 101.40 to 101.59, and what a party it was. The pair is outside taking a break from the excitement and having a fag before the US roll up
The global shining star that is the UK shone the way in the manufacturing stakes as we posted some very good numbers in all the PMI components. The pound hasn’t needed an excuse to run higher but got it anyway and we rose to kiss the 1.7150 level on the cheek. Again, strong orders and a barrier bar the way for now. If it’s a currency and it’s got a “Made in Britain” sticker on it then it’s been bought today.
As such, the economic differences between the UK and Europe are widening further and that was seen in EUR/GBP which slumped to 0.7981 from 0.8007, just ahead of a fairly big level at 0.7960
