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Current Market Sentiment | UK Manufacturing PMI
Our trade call is to sell Cable on a Manufacturing PMI reading below 51. Both stop-loss and take-profit approximately equal the ADR of 140 pips, but both should be set above significant levels of support or resistance.
Current Market Sentiment:
The Asian session saw multiple high impact data points; Building Approvals from Australia missed estimates at -7.5% m/m vs -2.9% expected. The Aussie saw some downside post release, and the decline continued with both the Chinese government NBS release and the Markit/Caixin release for Manufacturing PMI missing estimates at 49 and 48 respectively. There was limited risk-off reaction to the miss as the market has now priced in a steady slowdown in Chinese manufacturing.
After declining 40 pips during the first half of the session, the Aussie then saw upside as the RBA statement failed to strike any new dovish tone and largely reiterated the prior statement. The Aussie rallied 50 pips post-release, also helped by gradual moves higher in WTI and Asia-Pacific indices marginally in the green.
Ahead we have the Purchasing Managers’ Index for the UK’s Manufacturing sector.
P.S. This release was also covered in the weekly risk events video. You can watch it here.
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