24 Jul 2015
Gold, Antipodeans crash on China PMI miss, EZ PMIs – In focus
FXStreet (Mumbai) - A big miss on the China manufacturing activity gauge led the sell-off in Asia, with the Aussie emerging the biggest loser across the Fx space while gold plunged to 1076.20 - its lowest levels since Feb 2010. While USD/JPY traded almost unchanged below 124 handle amid broad USD rebound after the recent weakness.
Key headlines in Asia
Flash China PMI at 15-month low
AUD/USD cracks 0.73, risk of profit-taking
Gold hammered again, kisses multi-year trend low
Dominating themes in Asia - centered on JPY, AUD, NZD
A volatile Asian session mainly driven by disappointing China manufacturing PMI figures, which triggered a fresh sell-off across the board. Gold lost ground once again and fell nearly $ 15 following China data release which sparked demand concerns from the world’s largest consumer.
The Aussie also tumbled along with gold to fresh six-year lows of 0.7269 while NZD/USD also followed suit and headed towards fresh multi-years lows below 0.66 handle. Chinese factory production contracted at the steepest pace in 15 months in July with the Caixin China manufacturing PMI rose from 49.4 in June to a preliminary 48.2 in July.
More so, the Kiwi remained pressured after New Zealand's monthly merchandise trade balance fell into deficit for the first time since December last month. While the yen remains better bid versus the US dollar on increased demand for safety assets amid the latest China PMI-backed global sell-off.
Asian markets are heavy, with Chinese equities ditching its Asian counterparts. The Shanghai composite index now trades nearly +1% at 4167, extending gains for the seventh straight session. The Australian benchmark the ASX 200 trades -0.60% lower around 5557. The Nikkei 225 in Tokyo rose -0.65% at 20549. South Korea’s Kospi trades -0.77% at 2048.
Heading into Europe - centered on EUR, GBP
Finally a data-dry EUR calendar ends today, with the upcoming European session expected to be quite eventful. A raft of flash services and manufacturing PMIs will be reported from the Euro area economies later in the session.
The flash manufacturing PMI for Germany in June is expected to register the same 51.9 as recorded in June, while the index for the services sector is projected to show a small uptick to 54.0 from 53.8 recorded in the previous month.
France's flash manufacturing PMI is seen ticking up to 51.0 in July from 50.7 measured the month before. The services sector is expected to come in at 54.0, slightly lower than the 54.1 recorded in June.
The forecast for the EU flash manufacturing PMI shows stagnation at 52.5.for July, the same result as recorded a month ago. The EU's services sector is expected to show a small downtick to 54.3 from 54.4 reported the month before.
Later in the North American session, flash manufacturing PMI and new home sales data from the US will be on cards. Markets are expecting the Department of Commerce in Washington will unveil another 548,000 sales of new single-family homes. While that may be only a modest 0.4% increase since May.
Millan Mulraine, deputy head of US strategy at TD Securities notes, "Our expectation is for a modest 0.2% month-to-month advance in the pace of sales, marking the third consecutive monthly gain in this indicator as the recovery in housing sector continues to regain positive momentum."
EUR/USD Technicals
Research Team at AceTrader explained, "Euro's rally above Tuesday's high of 1.0869 to 1.1005 in European and then 1.1019 in New York confirms decline from May's peak at 1.1467 has formed a temporary low at Monday's 12-week bottom at 1.0808 and as long as 1.0922/23 support holds, upside bias remains for stronger retracement towards chart resistance at 1.1083 which is likely to hold today.”
“On the downside, only below 1.0869 would abort above short-term bullish scenario on euro as risk would shift to the downside for weakness towards 1.0808/12."
Key headlines in Asia
Flash China PMI at 15-month low
AUD/USD cracks 0.73, risk of profit-taking
Gold hammered again, kisses multi-year trend low
Dominating themes in Asia - centered on JPY, AUD, NZD
A volatile Asian session mainly driven by disappointing China manufacturing PMI figures, which triggered a fresh sell-off across the board. Gold lost ground once again and fell nearly $ 15 following China data release which sparked demand concerns from the world’s largest consumer.
The Aussie also tumbled along with gold to fresh six-year lows of 0.7269 while NZD/USD also followed suit and headed towards fresh multi-years lows below 0.66 handle. Chinese factory production contracted at the steepest pace in 15 months in July with the Caixin China manufacturing PMI rose from 49.4 in June to a preliminary 48.2 in July.
More so, the Kiwi remained pressured after New Zealand's monthly merchandise trade balance fell into deficit for the first time since December last month. While the yen remains better bid versus the US dollar on increased demand for safety assets amid the latest China PMI-backed global sell-off.
Asian markets are heavy, with Chinese equities ditching its Asian counterparts. The Shanghai composite index now trades nearly +1% at 4167, extending gains for the seventh straight session. The Australian benchmark the ASX 200 trades -0.60% lower around 5557. The Nikkei 225 in Tokyo rose -0.65% at 20549. South Korea’s Kospi trades -0.77% at 2048.
Heading into Europe - centered on EUR, GBP
Finally a data-dry EUR calendar ends today, with the upcoming European session expected to be quite eventful. A raft of flash services and manufacturing PMIs will be reported from the Euro area economies later in the session.
The flash manufacturing PMI for Germany in June is expected to register the same 51.9 as recorded in June, while the index for the services sector is projected to show a small uptick to 54.0 from 53.8 recorded in the previous month.
France's flash manufacturing PMI is seen ticking up to 51.0 in July from 50.7 measured the month before. The services sector is expected to come in at 54.0, slightly lower than the 54.1 recorded in June.
The forecast for the EU flash manufacturing PMI shows stagnation at 52.5.for July, the same result as recorded a month ago. The EU's services sector is expected to show a small downtick to 54.3 from 54.4 reported the month before.
Later in the North American session, flash manufacturing PMI and new home sales data from the US will be on cards. Markets are expecting the Department of Commerce in Washington will unveil another 548,000 sales of new single-family homes. While that may be only a modest 0.4% increase since May.
Millan Mulraine, deputy head of US strategy at TD Securities notes, "Our expectation is for a modest 0.2% month-to-month advance in the pace of sales, marking the third consecutive monthly gain in this indicator as the recovery in housing sector continues to regain positive momentum."
EUR/USD Technicals
Research Team at AceTrader explained, "Euro's rally above Tuesday's high of 1.0869 to 1.1005 in European and then 1.1019 in New York confirms decline from May's peak at 1.1467 has formed a temporary low at Monday's 12-week bottom at 1.0808 and as long as 1.0922/23 support holds, upside bias remains for stronger retracement towards chart resistance at 1.1083 which is likely to hold today.”
“On the downside, only below 1.0869 would abort above short-term bullish scenario on euro as risk would shift to the downside for weakness towards 1.0808/12."