Pound May Extend Drop as Soft PMI Data Trims BOE Rate Hike Bets
- British Pound May Extend Drop as Soft PMI Data Trims BOE Rate Hike Bets
- US ISM May Set Precedent for Risk Trends’ Response to Shifting Fed Outlook
- See Economic Releases Directly on Your Charts with the DailyFX News App
UK Manufacturing PMI data headlines the calendar in European trading hours. The gauge is expected to tick lower to 51.3 in September, pointing to the slowest pace of factory-sector activity growth since April 2013. UK economic news-flow has increasingly underperformed relative to consensus forecasts over the past month, opening the door for a downside surprise. Such an outcome may undercut BOE rate hike expectations, weighing on the British Pound.
Later in the day, the US ISM Manufacturing report will come into the spotlight. Economists predict slowdown here as well, with the third consecutive month of deceleration seen yielding the most sluggish growth since May 2013. A soft print may undermine Fed tightening speculation, weighing on the US Dollar.
The likely implications for risk appetite are a bit more complex however. At various times in recent weeks, the prospect of a nearing Fed hike seemed to boost sentiment because of what such a move would say about the health of the US economy. At other times however, it spooked investors worried about the implications of a policy roadblock to US growth at a time when the Eurozone remains sluggish and China continues to slow. Seeing which narrative proves dominant may help establish a benchmark for Friday’s higher-impact US employment figures.
On the commentary front, scheduled remarks from Atlanta Fed President Dennis Lockhart and San Francisco Fed President John Williams are in focus. Both policymakers have spoken in favor ofstarting stimulus withdrawal this year in recent days and seem likely to do the same this time. With that in mind, the threshold for a market-moving headline emerging out of either speechseems relatively high.
The Australian, Canadian and New Zealand Dollars outperformed while the anti-risk Euro and Japanese Yen came faced selling pressure in overnight trade as sentiment firmed. The move appeared to take its cues from an upbeat lead from Wall Street, where shares rose for the first time in five days. Upbeat manufacturing PMIs from Australian, Japan and China likewise helped.
New to FX? START HERE !
|23:00||NZD||QV House Prices (YoY) (SEP)||12.6%||-||11.3%|
|23:30||AUD||AiG Perf of Mfg Index (SEP)||52.1||-||51.7|
|23:50||JPY||Tankan Large Mfg Index (3Q)||12.0||13.0||15.0|
|23:50||JPY||Tankan Large Mfg Outlook (3Q)||10.0||10.0||16.0|
|23:50||JPY||Tankan Large Non-Mfg Index (3Q)||25.0||20.0||23.0|
|23:50||JPY||Tankan Large Non-Mfg Outlook (3Q)||19.0||19.0||21.0|
|23:50||JPY||Tankan Large All Industry Capex (3Q)||10.9%||8.7%||9.3%|
|23:50||JPY||Tankan Small Mfg Index (3Q)||0.0||-2.0||0.0|
|23:50||JPY||Tankan Small Mfg Outlook (3Q)||-2.0||-4.0||0.0|
|23:50||JPY||Tankan Small Non-Mfg Index (3Q)||3.0||1.0||4.0|
|23:50||JPY||Tankan Small Non-Mfg Outlook (3Q)||1.0||0.0||1.0|
|00:00||AUD||CoreLogic RP Data House Px (MoM) (SEP)||0.9%||-||0.3%|
|01:00||CNY||Manufacturing PMI (SEP)||49.8||49.7||49.7|
|01:00||CNY||Non-manufacturing PMI (SEP)||53.4||-||53.4|
|01:30||AUD||Job vacancies (AUG)||2.7%||-||2.1%|
|01:35||JPY||Nikkei Japan PMI Mfg (SEP F)||51.0||-||50.9|
|01:45||CNY||Caixin China PMI Mfg (SEP F)||47.2||47.0||47.0|
|01:45||CNY||Caixin China PMI Composite (SEP)||48.0||-||48.8|
|01:45||CNY||Caixin China PMI Services (SEP)||50.5||-||51.5|
|05:00||JPY||Vehicle Sales (YoY) (SEP)||-3.0%||-||2.3%|
|06:30||AUD||Commodity Index AUD (SEP)||-||79.7|
|06:30||AUD||Commodity Index (YoY) (SEP)||-||-20.9%|
|07:15||CHF||Retail Sales Real (YoY) (AUG)||-||-0.1%||Low|
|07:30||CHF||procure.ch Mfg PMI (SEP)||51.8||52.2||Medium|
|07:45||EUR||Markit/ADACI Italy Mfg PMI (SEP)||53.4||53.8||Low|
|07:50||EUR||Markit France Mfg PMI (SEP F)||50.4||50.4||Low|
|07:55||EUR||Markit/BME Germany Mfg PMI (SEP F)||52.5||52.5||Medium|
|08:00||EUR||Markit Eurozone Mfg PMI (SEP F)||52.0||52.0||Medium|
|08:00||CHF||KOF Institute Autumn Economic Forecast||-||-||Low|
|08:30||GBP||Markit UK PMI Mfg SA (SEP)||51.3||51.5||High|
|CCY||Supp 3||Supp 2||Supp 1||Pivot Point||Res 1||Res 2||Res 3|
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
To receive Ilya's analysis directly via email, please SIGN UP HERE
Contact and follow Ilya on Twitter: @IlyaSpivak
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.