The forex trading headlines for Asia trading today, Wednesday July 24
- China July HSBC manufacturing flash PMI 47.7 (vs. 48.2 expected and prior), an 11 month low
- The PMI looks awful, but Westpac argues there are bright spots
- Japan trade balance for June: Y -180.8bn (vs. expected is Y -155.7bn)
- Japan June Adjusted trade balance: Y -598.7bn (vs. expected is Y -594.7bn)
- Japan June Exports: 7.4%y/y, (vs. expected +10.0%, prior +10.1%)
- Japan June Imports: 11.8%y/y (vs. expected +13.8%, prior +10.1%)
- Australia Q2 CPI: +0.4% q/q (vs. expected +0.5%, prior +0.4%)
- Australia Q2 CPI: 2.4% y/y (vs. expected +2.5% y/y, prior +2.5%)
- Australia Q2 CPI, trimmed mean: +0.5% q/q (vs. expected +0.5%, prior +0.3%)
- Australia Q2 CPI trimmed mean: 2.2% y/y (vs. expected +2.1% y/y, prior +2.2% y/y) – its the ‘trimmed mean’ that the RBA pays most attention too, and it ticked up slightly
- New Zealand June trade balance NZ$414m (vs. +105m expected)
- New Zealand June exports NZ$4.02bn (vs. 4.01bn expected)
- New Zealand June Imports NZ$3.6 bn (vs. 3.90bn expected)
- Japan’s chief cabinet secretary Suga: Must be extremely cautious on sales tax increase decision
- The Australian cabinet Expenditure Review Committee is looking for a further A$6bn in cuts from spending, with Australian Treasurer Bowen saying government will continue to pursue responsible fiscal strategy
- Apple results were announced, at $7.47 per share (beats expectations at $7.30); Revenues in at 35.3bn ( expected at $35.04bn)
- The Wall Street Journal reported that prosecutors are preparing to announce criminal charges as early as this week against SAC
NZD/USD was an early mover, popping to 0.8010 briefly in the wake of trade figures, where it found sellers waiting.
The session was then quiet across all currencies up until the release of the Australian Q2 CPI, followed 15 minutes later by the China July HSBC manufacturing flash PMI.
Australian CPI came in slightly below expectations on the headline figure, but slightly above expectations on the core (the ‘trimmed mean’) figure. Its the core figure that is most interest to the RBA in their interest rate policy deliberations, and as such the slight tick higher is a count against the potential for a rate cut at the next meeting (August 6). The OIS market marked down the probability of a 25 basis point cut (to 54% as I type) in response. AUD/USD popped 15 points into sell orders at 0.9300, soaked them up and then ran to 0.9320 on stops before halting.
It was then a few minutes until the China July HSBC manufacturing flash PMI.
Which came in at an 11-month low (see bullets, above, and note the very poor results for the sub-indices that Westpac, nevertheless, believe have several positive signs – also linked).
AUD/USD was immediately marked lower in the wake of the poor result and in subsequent minutes tested bids below 0.9250, where it found some support for a bounce to 0.9270 and then some stability as it awaits fresh impetus from Europe and the UK.
NZD/USD sold off with the AUD, to below 0.7950, finding bids there.
The USD showed a little strength after the China data, with EUR/USD and GBP/USD both off 20-odd points. Clearly, and has been the case in the Asian timezone of late, these were not where today’s action was.
USD/JPY, too, benefited from the broader USD strength, putting on 40 points from its day’s lows, running into resistance from 99.75.