Euro Likely to be More Sensitive to Soft vs. Upbeat PMI Data

Talking Points:

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  Euro likely to be more sensitive to soft vs. upbeat Eurozone PMI reports
  


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  New Zealand Dollar gains as RBNZ’s Wheeler talks down rate cut bets
  


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  Aussie rises as Yellen pre-positioning slows, Canadian Dollar rebounds
  

The preliminary set of August Eurozone PMI figures headlines the economic calendar. The region-wide composite gauge is expected to show that manufacturing- and service-sector activity growth slowed a bit compared with the prior month. Traders will look to the data to gauge the extent to which uncertainty triggered by the outcome of the “Brexit” referendum is hurting performance.

On balance, results in line or even better than economists’ expectations are unlikely to alter the trajectory of ECB monetary policy, undermining their ability to drive lasting Euro momentum. On the other hand, a downside surprise may speak to the central bank’s pledge to boost stimulus if necessary and apply pressure to the single currency.

The New Zealand Dollar outperformed in Asian trade, rising after comments from RBNZ Governor Graeme Wheeler poured cold water on interest rate cut speculation. The Australian Dollar likewise advanced as a surge in Fed rate hike speculation struggled for follow-through (as was suspected), offering a lift to the yields-sensitive currency. Indeed, the US Dollar traded broadly lower against its major counterparts.

The Canadian Dollar corrected higher having plunged alongside crude oil yesterday. The benchmark WTI contract posted the largest daily drop in two weeks after Iraq, OPEC’s second largest producer, signaled an on-coming output boost. Energy exports are over 22 percent of Canada’s total cross-border sales, making oil prices an important input for overall growth and monetary policy trends.

Losing money trading in the FX markets? This may be why.

Asia Session

GMT	CCY	EVENT	ACT	EXP	PREV
21:00	NZD	RBNZ Governor Wheeler Speaks in Dunedin	-	-	-
23:30	AUD	ANZ Roy Morgan Consumer Confidence	121.8	-	117.6
01:45	CNY	MNI August Business Indicator	54.3	-	55.5
02:00	JPY	Nikkei Japan PMI Mfg (AUG P)	49.6	-	49.3
04:00	JPY	Kuroda Speaks at BOJ's Fintech Conference	-	-	-

European Session

GMT	CCY	EVENT	EXP	PREV	IMPACT
06:00	CHF	Trade Balance (JUL)	-	3.55b	Low
06:00	CHF	Exports Real (MoM) (JUL)	-	-3.3%	Low
06:00	CHF	Imports Real (MoM) (JUL)	-	-4.0%	Low
07:00	EUR	Markit France Mfg PMI (AUG P)	48.8	48.6	Medium
07:00	EUR	Markit France Services PMI (AUG P)	50.5	50.5	Medium
07:00	EUR	Markit France Composite PMI (AUG P)	50.4	50.1	Medium
07:30	EUR	Markit/BME Germany Mfg PMI (AUG P)	53.6	53.8	High
07:30	EUR	Markit Germany Services PMI (AUG P)	54.4	54.4	High
07:30	EUR	Markit/BME Germany Composite PMI (AUG P)	55.1	55.3	High
08:00	EUR	Markit Eurozone Mfg PMI (AUG P)	52.0	52.0	High
08:00	EUR	Markit Eurozone Services PMI (AUG P)	52.8	52.9	High
08:00	EUR	Markit Eurozone Composite PMI (AUG P)	53.1	53.2	High
09:40	GBP	BOE ILTR Operation Results	-	-	Medium
10:00	GBP	CBI Trends Total Orders (AUG)	-10	-4	Low
10:00	GBP	CBI Trends Selling Prices (AUG)	-	5	Low
10:30	EUR	ECB's Coeure, Lane, Smets on Panel in Geneva	-	-	Medium

Critical Levels

CCY	Supp 3	Supp 2	Supp 1	Pivot Point	Res 1	Res 2	Res 3
EUR/USD	1.1182	1.1245	1.1283	1.1308	1.1346	1.1371	1.1434
GBP/USD	1.2866	1.2988	1.3062	1.3110	1.3184	1.3232	1.3354

--- Written by Ilya Spivak, Currency Strategist for DailyFX.com

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Euro Likely to be More Sensitive to Soft vs. Upbeat PMI Data
Euro Likely to be More Sensitive to Soft vs. Upbeat PMI Data
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