Forex today was weighed down by renewed China slowdown concerns in Friday’s Asian trading after the Chinese Caixin manufacturing PMI contracted further and hit the lowest since February 2016. As a result, the optimism fuelled by the US-China trade progress waned. Meanwhile, the US dollar traded better bid, having consolidated the overnight rebound amid a risk-on rally in the US equities.
On the Asia-pac currencies front, the Aussie suffered the most, down nearly -0.50% from 0.7280 levels to near 0.7240 region. The Kiwi also traded on the defensive near the 0.69 handle while the Yen held steady against its American counterpart, leaving the USD/JPY pair capped below the 109 handle.
Among the related markets, gold prices on Comex weaker below the 1325 levels, despite cautious trading in the Asian equities. Both crude benchmarks traded modestly flat amid a bearish technical setup and ahead of the US rigs count data.
Main Topics in Asia
Bets on US rate cut grow after Fed’s patient stance – CME FedWatch
China and U.S. trade talks summary and sound bites from two day discussions in Washington
Gold off 9-month tops, steadies near $ 1325 ahead of US NFP
China Caixin Manufacturing PMI drops to 48.3 in Jan, weakest since Feb 2016
Barclays Economist Chang: PBOC may cut benchmark interest rate today – Bloomberg
China will expand imports of US services, agriculture products – Xinhua
Trump to Liu: A US trade delegation led by Lighthizer, Mnuchin will visit China mid-Feb for trade talks – Xinhua
WTI Oil Technical Analysis: bearish pin bar makes today’s close pivotal
USD/INR jumped 2% in January, focus on India’s interim budget
PBOC told banks to moderate pace of lending in January
Key Focus Ahead
Markets buckle up for an eventful and busy macro calendar for Friday’s European and NA session ahead, as the Eurozone flash CPI estimate and the US payrolls data are likely to remain in the spotlight. Also, the final manufacturing PMI reports from across the Euro are economies will start dropping in from 0815 GMT. Manufacturing sector activity reports from Germany, Italy and Eurozone will be closely eyed for fresh hints on the bloc’s economic growth prospects. From the UK docket, the UK manufacturing PMI for January will be released at 0930 GMT, which is expected to come in weaker at 53.5 vs. 54.2 last.
At 1330 GMT, the US labor market report will be published, with the average hourly earnings data eagerly awaited for fresh dollar trades. The Canadian manufacturing PMI will be reported at 1430 GMT, followed by the US consumer sentiment and ISM manufacturing PMI data releases at 1500 GMT.
EUR/USD: resting below 100-day MA, data heavy day ahead
The pair may slide further to 10-day MA at 1.14 if the preliminary Eurozone CPI prints below estimates. The decline, however, would be reversed if the US wage growth numbers disappoint expectations, validating Fed’s dovish turn.
The GBP/USD pair trades modestly flat near the 1.31 handle heading towards the London opening, as the upside attempts continue to get sold-off ahead of the last amid broad-based US dollar rebound and looming Brexit uncertainty.
US NFP Preview: 9 Major Banks expectations from January payrolls report
Today, we have an all-important US nonfarm payrolls report due for the month of January, and as we get closer to the release time, here are the expectations as forecasted by the economists and researchers of 9 major banks.