Thursday 24th March: European Open Briefing

Global Markets:

• Asian stock markets: Nikkei down 0.10 %, Shanghai Composite lost 1.35 %, hang Seng declined 0.50 %, ASX gained 0.30 %
• Commodities: Gold at $1185 (-0.20 %), Silver at $16.85 (-0.20 %), WTI Oil at $46.88 (-1.20 %), Brent Oil at $55.54 (-0.50 %)
• Rates: US 10 year yield at 1.92, UK 10 year yield at 1.511, German 10 year yield at 0.218

News & Data:

• China HSBC Manufacturing PMI 49.2, Expected: 50.6, Previous: 50.7
• Japan Manufacturing PMI 50.4, Expected: 52.1, Previous: 51.6
• Australia CB Leading Index 0.4 %, Previous: 0.3 %
• Bank of Korea Governor Lee: South Korea Economy To See Volatility During Recovery — BBG
• China’s Yuan Exchange Rate May Continue To Be Volatile — Securities Journal
• Japan Economics Minister Amari: Abe To Meet With Business, Labour Leaders Again Soon To Seek Continued Wage Increases — BBG
• PBOC Fixes Yuan At 6.1398 (previous 6.1448)
• Fed’s Williams: Sees US Economy Growing About 2.5% In 2015
• New Zealand FinMin English: NZ$ Gains Are Headwind for Exports — BBG
• New Zealand FinMin English: The Rise In The New Zealand Dollar Was A “Bit Of A Challenge For Exporters To Australia”
• Fed’s Williams: Sees Stronger Dollar Pushing Down Growth Forecast, But This Is Manageable — BBG

Markets Update:

The US Dollar strengthened slightly overnight as the weak Chinese PMI print weighed on risk appetite. Asian equities are mostly lower, as well as commodities. AUD/USD reached a high of 0.7905, but then declined to 0.7835 after disappointing Chinese data. Key intraday support noted at 0.7770, while pivotal resistance now lies at 0.80/0.8020. NZD/USD closed the day above the 0.7610 key resistance level, which suggests further gains ahead. The Kiwi Dollar remained very well bid in the Asian session and 0.78 is the next bull target. USD/JPY remains weak and leveraged funds continue to cover existing long positions. The 119.50 support level is holding for now, but a break lower seems imminent. A clear break sub-119.20 would then suggest a move back towards 118.00.

Looking ahead, we have quite a busy econ calendar. In the EU session, we’ll get the Euro Zone Manufacturing/Services PMIs and UK inflation data. Later in the day, the US will release their latest inflation numbers, as well as New Home Sales & Manufacturing PMI data.

Upcoming Events:

• 08:00 GMT – French Manufacturing PMI (48.5)
• 08:00 GMT – French Services PMI (52.8)
• 08:30 GMT – German Manufacturing PMI (51.5)
• 08:30 GMT – German Services PMI (55.0)
• 09:00 GMT – Euro Zone Manufacturing PMI (51.5)
• 09:00 GMT – Euro Zone Services PMI (53.9)
• 09:30 GMT – UK CPI (0.3 % m/m, 0.1 % y/y)
• 09:30 GMT – UK PPI Input (1.6 % m/m, -12.4 % y/y)
• 09:30 GMT – UK PPI Output (-0.1 % m/m, -1.9 % y/y)
• 09:30 GMT – UK House Price Index (10.2 % y/y)
• 12:30 GMT – US Core CPI (0.1 % m/m, 1.6 % y/y)
• 12:30 GMT – US CPI (0.2 % m/m, -0.1 % y/y)
• 13:00 GMT – US House Price Index (0.5 % m/m)
• 13:45 GMT – US Manufacturing PMI (54.6)
• 14:00 GMT – US Richmond Manufacturing Index (2.0)
• 14:00 GMT – US New Home Sales (-1.3 % m/m, 470k)
• 21:45 GMT – New Zealand Exports (NZ$4.08bln)
• 21:45 GMT – New Zealand Imports (NZ$3.70bln)
• 21:45 GMT – New Zealand Trade Balance (NZ$350mln m/m, -NZ$1.87bln y/y)

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