Global Markets:

  • RBA leaves rates unchanged at 2.50 %
  • China NBS Manufacturing PMI (MAR): 50.3, Expected: 50.3, Previous: 50.2
  • China HSBC Manufacturing PMI: 48.0, Expected: 48.1, Previous: 48.1
  • Japan Tankan Large Manufacturing Index (1Q): 17 vs. Est. 19; 16 Prior
  • Japan Tankan Large Non-Manufacturing Index (1Q): 24 vs. Est. 24; 20 Prior
  • Japan Tankan Large Manufacturing Outlook (1Q): 8 vs. Est. 13; 14 Prior
  • Japan Tankan Large Non-Manufacturing Outlook (1Q): 13 vs. Est. 15; 17 Prior
  • Japanese Economy Minister Amari: Tankan outlook reflects demand concern after sales tax
  • Japanese Finance Minister Aso: Tankan shows Abenomics is improving econ, also next few months key to decide if tax will be raised to 10%
  • BOJ Governor Kuroda: BOJ’s QQE policy is having the intended effect, also assured that Japan is smoothly following path to 2% price target
  • Asian markets are mixed this morning; Nikkei almost unchanged on the day, while the Shanghai Composite is up 0.65 %
  • Gold trading at $1285 (+0.10 %) after reaching a low of $1278 earlier
  • US 10 year yield stands at 2.741

FX Flows/Orders:

  • USD/JPY saw a small rally after the Tankan releases, pushing the pair to a session high of 103.33
  • Offers from Japanese names seen ahead of the 103.50 level; bids solid at 102.80 and 102.50/55
  • Whipsaw price action in AUD/USD as the Chinese PMI data first drove it 0.9255 and the RBA release later caused a sharp move to 0.9302
  • Aussie likely to remain bid; decent demand seen around 0.9220, then 0.9180
  • To the topside, mainly profit-taking supply above 0.93 until 0.9330 where selling interest is increasing
  • EUR/JPY stops above 142.00 were triggered yesterday and demand from leveraged funds pushed it to a high of 142.60; intraday support seen at 141.80 and 141.40 (55 HMA)
  • Supply from Middle East sovereign wealth funds and Asian names capped the topside in EUR/USD, but stops above 1.3810 still look vulnerable
  • Bids clustered between 1.3710 and 1.3725 – 1.37 the pivotal level
  • GBP/USD strengthened after dovish comments from Fed Chair Yellen and heavy EUR/GBP sales, breaching the 1.6667 resistance level
  • 1.6720 will be good resistance, while support noted at 1.6638 (55 HMA) and 1.6613 (21 DMA) ahead of the 1.66 bids

Market Sentiment:

The RBA left rates unchanged at 2.50 % as expected. The statement didn’t bring any surprises with the central bank noting that the Australian Dollar remains high by historical standards and that it sees a likely period of interest rate stability. AUD/USD had a brief rally above 0.93, but declined back to session lows amid profit-taking flows. The $A is likely to remain bid as RBA’s concerns about the currency rate have eased.

Upcoming Events:

  • 08:13 GMT – Spanish Manufacturing PMI (52.4)
  • 08:30 GMT – Swiss SVME PMI (56.7)
  • 09:43 GMT – Italian Manufacturing PMI (52.1)
  • 09:48 GMT – French Manufacturing PMI (51.9)
  • 09:53 GMT – German Manufacturing PMI (53.8)
  • 09:55 GMT – German Unemployment Change (-10k)
  • 09:55 GMT – German Unemployment Rate (6.8 %)
  • 09:00 GMT – Euro Zone Manufacturing PMI (53.0)
  • 09:30 GMT – UK Manufacturing PMI (56.7)
  • 10:00 GMT – Euro Zone Unemployment Rate (12.0 %)
  • 13:30 GMT – Canadian RMPI (3.0 % MoM, -1.0 % YoY)
  • 13:55 GMT – US Redbook
  • 15:00 GMT – US ISM Manufacturing PMI (54.0)