China PMI Data Gives Risk An Early Boost

The FX markets started the week in a risk positive mood as the dollar weakened across the board,
particularly against the AUD and sterling. The official manufacturing PMI from China came in at 51.4 versus expectations of 51.1. The HSBC guide to this number was also higher by the same difference at 50.8 against the consensus of 50.5. AUD has rallied 60 points in the Asian session following the Chinese data as domestic data also showed an improvement in the way of stronger building approvals. I see some headway into the 0.9200-0.9250 area for AUD, especially as there is some negative political news coming from Australia with a potential downgrade from rating agencies if Australia fails to raise its debt ceiling levels.

The proud pound has made further gains, breaking above the 2013 high of 1.6380 following media reports that the Office of Budget Repository is to revise higher their 2014 GDP projections when UK Chancellor George Osborne releases his autumn statement on Thursday. The next target for cable is August 2011 high of 1.6620

Today’s focus will be the PMI data from EU,UK and the US as we head into a data heavy week along with Central Bank meetings from the RBA,BOC,ECB and the BOE with the week ending with the latest US jobs data.

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