MORNING BRIEFING: Chinese PMI lower, but risk appetite still intact

[RTFX-Trading]

MORNING BRIEFING: Chinese PMI lower, but risk appetite still intact

What’s new:
China: Chinese July PMI comes out lower than June’s PMI
Asia: Equity Indices in the Green on the back of good corporate earnings
Forex Markets: Risk appetite seems to be intact as gains favour ‘riskier assets’
EUR/USD: Recovery from Friday’s low indicative of consistent support

Today:


Rates in Asia and Indices:
EURUSD: 1.3089 - 1.3054.
USDCHF: 1.0469 - 1.0393.
GBPUSD: 1.5782- 1.5696.
EURJPY: 113.42 – 112.72.
USDJPY: 86.81 – 86.33.
DowJones: 10’465.94 -0.01%
NASDAQ: 2'254.70 +0.13%
S & P 500: 1'101.60 +0.01%
Nikkei: 9’570.31 +0.35%
Shanghai: 2'672.52 +1.33%
Gold: $ 1'184.40
Crude Oil: $ 79.23

 
Comments:

In China, news released yesterday, revealed that Chinese PMI fell to a 17 month low during July reaching levels of 51.2, from 52.1 last June. This decrease is seen resulting from Government’s efforts to deter real estate speculation. Analysts did point out however that July readings typically come out less than the June readings, possibly due to seasonal shifts.

Asian equity indices appeared unhurt by China’s slower PMI as they traded in the green today, basically on the back of robust corporate earnings.

The US Dollar loses 0.25%, Swiss Franc 0.28% and Japanese Yen 0.57% when compared to their major counterparts this morning. While ‘riskier’ currencies found support this morning. This shows that the market is still fostering some risk appetite.

EUR/USD was trading in the range of 1.3054-1.3089 earlier today. Recovery from Friday’s lows at around 1.2980 confirms the strength of support still available. RTFX TraderTip identifies a possible acceleration if the pair is trading beyond the 1.3062 or 1.3005 significant levels. Support lies at 1.2976/1.2922 while resistance is seen at 1.3089/1.3148.

This coming week: This week’s ECB’s monthly press conference, due next Thursday, will be a highlight for the EURO; on Thursday as well, the BoE is due to announce its latest policy decision; While the United States will publish its payrolls next Friday.

Good day,


Rudolf Muscat
Trading desk

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