The start of a new month and Asia’s eyes were fixed on the flow of manufacturing PMI data from across the region.
China data was as, or slightly better than expected but had little bearing on risk appetite/currency direction during the session. The official manufacturing PMI rose to 50.2 from 49.8, as expected and scaled the 50 threshold for the first time in 3 months as sub-indices for output and new orders improved. The gauge for output rose to 52.1, the highest since May while the index of new orders rose above the 50 mark for the first time in 6 months. The HSBC equivalent was higher than the flash forecast released last week, rising to 49.5 from 47.9 instead of the 49.1 in the flash estimate.
The data out of Australia also improved but not as robustly as the China numbers. Manufacturing PMI rose to 45.2 from 44.1, but remained sub-50 for the eighth month. Other Ozzie data showed house prices falling 1.0 percent on-month following a 1.4 percent increase the previous month while in the third quarter export prices fell 6.4 percent q/q and import prices a more subdued -2.4 percent q/q.
It was a mixed session overnight with early risk-positive sentiment gradually being eroded as the session wore on. Early reports that Spain was on track to reach or beat its 2012 deficit target encouraged risk appetite and EURUSD climbed back above 1.30. However, as US traders returned to their desks USD demand was evident, with month-end portfolio hedging also USD-positive, and currency pairs slid back to opening levels by the end of the session.
Norges Bank kept rates unchanged as expected but surprised with a less-hawkish view on monetary policy than in the last policy report, saying it was unlikely to start raising rates until March at the earliest.
On the data front, the Chicago PMI improved to 49.9 from 49.7 but did not quite match expectations of 51.2 while the NAPM for Milwaukee slid back to 43.3 after last month’s rebound to 47.1. Canadian GDP disappointed in August with its first negative reading -0.1 percent m/m) since February. Mining shutdowns for maintenance and lower factory production were responsible for the weak number. CAD weakened against the resurgent US dollar.
Data Highlights
- CA Aug. GDP out at -0.1% m/m, +1.2% y/y vs. 0.2%/1.7% expected and 0.2%/1.9% prior resp.
- US Q3 Employment Cost Index out at +0.4% q/q vs. 0.5% expected and 0.5% prior
- US Oct. NAPM – Milwaukee out at 43.3 vs. revised 47.1 prior
- US Oct. Chicago PMI out at 49.9 vs. 51.0 expected and 49.7 prior
- AU Oct. AiG Performance of Manufacturing out at 45.2 vs. 44.1 prior
- AU Oct. RPData-Rismark House Price Index out at -1.0% m/m vs. +1.4% prior
- AU Q3 Export Price Index out at -6.4% q/q, as expected vs. revised +0.9% prior
- AU Q3 Import Price Index out at -2.4% q/q vs. -1.2% expected and +2.4% prior resp.
- China Oct. Manufacturing PMI out at 50.2, as expected vs. 49.8 prior
- China Oct. HSBC Manufacturing PMI out at 49.5 vs. 49.1 expected and 47.9 prior
(All Times GMT)
- JP Vehicle Sales (0500)
- AU Commodity Price Index (0530)
- UK Nationwide House Prices (0700)
- Sweden Swedbank PMI Survey (0730)
- Swiss Retail Sales (0815)
- Swiss PMI Manufacturing (0830)
- UK PMI Manufacturing (0930)
- US Challenger Job Cuts (1130)
- US RBC Consumer Outlook Index (1200)
- US ADP Employment Change (1215)
- US Non-farm Productivity (1230)
- US Unit Labour Costs (1230)
- US Initial Jobless Claims (1230)
- US Markit Final PMI (1258)
- US Bloomberg Consumer Comfort Index (1345)
- US Consumer Confidence (1400)
- US ISM Manufacturing (1400)
- US ISM Prices Paid (1400)
- US Construction Spending (1400)
- US Fed’s Lockhart to speak (1630)