- Another rate hike rumour out of China saw the SSEC fall by over 3% in afternoon trade
- Australian balance of payments deficit larger than expected
- Net exports had less negative impact on Australian GDP than expected
- Australian building approvals much higher than expected
- Japan manufacturing PMI slightly higher at 47.3 but still showing overall contraction
- Japan jobless rate slightly higher at 5.1%
- Japanese wages growth higher for 8th straight month
AUD/USD has been the most volatile pair today, impacted favourably at first by the economic data and then knocked lower by rumours of a Chinese rate hike. The pair opened around .9630 and traded quietly until the trade and housing data was released. The headline deficit number was disappointing but this was balanced by very strong housing approvals and also the net export data, which suggested fears about tomorrows GDP number might be unfounded. The pair rallied to a high of .9660 after the data but was then knocked lower by the sharp fall on the Shanghai SE. Ranges: .9591/.9660
EUR/USD tended to follow the AUD around as both are seen as risk related trades. Dealers targeted trailing stops above 1.3150 but were unable to trigger them and it fell sharply on the China rumours and on EUR/JPY selling. Ranges: 1.3077/1.3149, EUR/CHF 1.3082/1.3133
USD/JPY has ignored the raft of Japanese economic data and has been mainly impacted by cross flows. Ranges: USD/JPY 84.05/30, EUR/JPY 110.00/68
Cable has followed the EUR/USD mainly although to a lesser degree with the EUR/GBP falling slightly. Ranges: 1.5527/75, EUR/GBP .8420/48.
Markets: Nikkei -1.1%, HK -1.1%, Shanghai -3.0%, Kospi +0.3%. Gold $1365/oz.
