Dollar weakens broadly in relatively quiet Asian session today, while Australian Dollar is strengthening. Asia markets are trading mildly lower, but losses are limited. Month-end flow, plus holiday in the UK and the US, could keep activity subdued today. But the week ahead is extremely busy, with lots of first-tier economic data featured.
Technically, Dollar’s rebound attempt faltered quickly last Friday. Some near term resistance levels are still intact, keeping the greenback mildly bearish in general. The levels include 1.4090 support in GBP/USD, 0.7673 support in AUD/USD, 0.9046 resistance in USD/CHF and 1.2201 resistance in USD/CAD. We’d pay attention to whether selling in Dollar would come back soon.
In Asia, at the time of writing, Nikkei is down -1.07%. Hong Kong HSI is down -0.5%. China Shanghai SSE is down -0.20%. Singapore Straits Times is down -0.53%. Japan 10-year JGB yield is down -0.0014 at 0.084.
Japan industrial production rose 2.5% mom, retail sales rose 12% yoy
Japan industrial production grew 2.5% mom in April, below expectation of 4.1% mom. Manufacturers surveyed by the Ministry of Economy, Trade and Industry (METI) expected output to contract -1.7% in May, followed by a 5.0% rebound in June.
Retail sales rose 12.0% yoy, below expectation of 15.4% yoy. Over the month, sales dropped -4.5% mom on a seasonally adjusted basis.
China PMI manufacturing edged lower to 51.0, PMI non-manufacturing rose to 55.2
China official PMI manufacturing dropped slightly to 51.0 in May, down from 51.1, below expectation of 51.1. Looking at some details, production rose 0.5 to 52.7. New orders dropped to 51.3, while raw material inventory dropped to 47.7. New export orders also dropped to 48.2.
PMI non-manufacturing rose to 55.2, up from 54.9, above expectation of 52.7.
New Zealand ANZ business confidence rose to 1.8, economy struggling to keep up with demand
New Zealand ANZ business confidence rose to 1.8 in May, up from April’s -2.0, but well below preliminary reading of 7.0. Own activity outlook rose to 27.1, up from April’s 22.2, but below preliminary reading of 32.3.
Looking at some more details, export intentions rose from 9.1 to 12.2. Investment intentions rose from 17.1 to 18.9. Cost expectations rose from 76.1 to 81.3. Employment intentions rose from 16.4 to 20.5. Pricing intentions rose from 55.8 to 57.4.
ANZ said: “The New Zealand economy is struggling to keep up with demand, and cost and inflation pressures continue to build. Firms are having trouble sourcing inputs to production. We wouldn’t read too much into the drop in activity indicators in the second half of the month just yet, as it may have been influenced by Budget uncertainty. We won’t have to wait long to get a fresh read, with the preliminary June data due to be released on 9 June.”
An extremely busy week ahead
It’s an extremely busy, and potentially…
Read More: Dollar Mildly Lower in Holiday Mood, Busy Week Ahead