- South Korea July CPI falls 0.2%m/m, rises 1.5% y/y.
- South Korea July manufacturing PMI sinks to 47.2 from 49.4.
- South Korea July trade balance at 2.7 bln vs prior 4.96 bln.
- U.K. BRC July shop price index rose 1%y/y .
- Australia AiG manufacturing index falls 6.9 points to 40.3 , lowest in three years.
- Australia 2Q house price index +0.5%q/q(-0.5% forecast) ,-2.1% y/y (-4.2% forecast).
- PBOC eyes Aussie state bonds - WSJ
- China July manufacturing PMI 50.1 (vs. forecast of 50.5) -WSJ
- HSBC July PMI 49.3 vs. prior 48.2 . Sub-index rises to 50.9, first expansion in 5 months.
- What would a wrap up be with out Azumi speaking , Inappropriate for BOJ to buy foreign assets as a substitute for FX intervention. Finance ministers should have sole jurisdiction on FX intervention as it involves negotiations with other nations. OF course his usual “not ruling out every possible step against excessive Yen moves.
- Geithner interview on BBG tv : see highlights below.
The market was basically comatose till the release of China’s PMI number (50.1 , an eight month low) that was below forecast of 50.5 . Aussie $ got sold , Nzd got sold , Euro got sold , and Usd/Yen broke through the 78.00 level afterwards.
Euro traded in narrow range (1.2305/1.2280) as market awaits action by the ECB on Thursday .
Usd/Yen excitement appeared when the 78.00 level was breached and with stops triggered we saw a low of 77.90 given . Some support at 77.90 and of course slight intervention fears keeping the yen around this 78.00 now.
Aussie $ consolidated around the 1.0490 level before the PMI number triggered scattered stops below 1.0480 brought it to a low of 1.0464. Continued Aud/Yen selling out of Tokyo kept it under pressure . It has since found support and has retraced back to the starting level of 1.0490.
Think market will consolidate around these levels as we wait for the ECB on Thursday (possibly the PBOC) , the U.S. employment numbers on Friday , plus any signs of QE3.
Have a good day and good luck .
