Intraday Market Thoughts

RBA, Tankan and China PMI Welcome Q3

by Adam Button
Jul 1, 2014 1:13

Cable ended the quarter at the highest levels since 2008 as the US dollar slumped. On the day the Swiss franc was the leader while the kiwi lagged. The RBA decision and Japanese Tankan are major events to start Q3.

The Asia-Pacific calendar is filled with risks that could set the stage for Q3 and beyond. The first is at 2350 GMT when the Q2 Japanese Tankan is released. Measures of manufactures, capex and expectations are all key for the BOJ as officials mull whether to unleash more QE.

So far the economy has navigated the higher consumption tax without any hiccups. Signs of a continued smooth ride might eliminate the chance of QE and pull USD/JPY toward 100.00.

Next is the Chinese official manufacturing PMI at 0100 GMT. The consensus is for a rise to 51.0 from 50.8. The market didn't initially cheer the strong manufacturing numbers in the HSBC survey last week but confirmation and a fresh calendar could spur a larger reaction.

We fear AUD/USD traders are complacent ahead of the RBA decision at 0430 GMT. The market is looking for more of the status quo as the RBA plays a game of wait-and-see but there's a small chance of a hawkish surprise. Although employment was soft last month there are better signs on investment and CPI, plus China may be turning a corner.

Technically, AUD/USD rebounded once again Monday and remains close to the April high of 0.9461. A break could signal a renewed round of Australian dollar excitement and jawboning from Stevens is almost powerless to halt AUD gains. 

Act Exp Prev GMT
Chicago PMI
62.6 63.0 65.5 Jun 30 13:45
Markit Manufacturing PMI (JUN)
57.5 Jul 01 13:45
ISM Manufacturing PMI (JUN)
55.9 55.4 Jul 01 14:00
Nomura/ JMMA PMI Manufacturing (JUN)
51.1 Jul 01 1:35
52.9 52.5 Jul 01 7:30
50.8 Jul 01 1:00
49.4 Jul 01 1:45
Tankan Non - Manufacturing Index (Q2)
19 19 24 Jun 30 23:50
Tankan Large Manufacturing Index (Q2)
12 15 17 Jun 30 23:50
Tankan Large Manufacturing Outlook (Q2)
15 17 8 Jun 30 23:50
Tankan Non - Manufacturing Outlook (Q2)
19 21 13 Jun 30 23:50

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