Forex trading news and economic data 1 September 2015

  • Asia catch up - ForexLive Asia FX news wrap: All eyes once again to China

The data

  • RBA announce NO CHANGE in rates - as expected
  • South Korea's exports fall most since 2009 in August
  • August 2015 Japan vehicle sales +2.3% vs -1.3% prior y/y
  • August 2015 Australia commodity index 79.7 vs 79.5 prior
  • August 2015 German unemployment rate 6.4% vs 6.4% exp
  • July 2015 Italian unemployment rate 12.0% vs 12.6% exp
  • July 2015 UK BOE consumer credit 1.173bn vs 1.200bn exp
  • July 2015 Eurozone unemployment rate 10.9% vs 11.1% exp
  • Q2 2015 Italian GDP final 0.3% vs 0.2% exp q/q

The manufacturing numbers

  • August 2015 Ireland Markit Investec manufacturing PMI 53.6 vs 56.7 prior
  • Netherlands make it 2 for 2 in soft EZ manufacturing PMI's
  • August 2015 Spanish Markit manufacturing PMI 53.2 vs 53.2 exp
  • August 2015 Swiss SVME manufacturing PMI 52.2 vs 49.7 exp
  • August 2015 Italian Markit ADACI manufacturing PMI 53.8 vs 54.8 exp
  • August 2015 French Markit manufacturing PMI final 48.3 vs 48.6 exp
  • August 2015 German Markit manufacturing PMI final 53.3 vs 53.2 exp
  • August 2015 Eurozone Markit manufacturing PMI 52.3 vs 52.4 exp
  • August 2015 UK Markit CIPS manufacturing PMI 51.5 vs 52.0 exp
  • Manufacturing data makes the global growth picture clear

The headlines

  • "As you were" for AUD after RBA stand pat and brush off China market turmoil
  • Germany's Sentix research shows 17.2% chance of Eurozone breakup
  • Spain's de Guindos says Spain will create 600k jobs this year
  • Japan's Suga says he's watching market movements together with G7
  • China State planner says stock market volatility is contained
  • IMF's Lagarde says global growth will be moderate and weaker than expected last July
  • Forex option expiries for the 10am (14.00 GMT) New Your cut 1 September 2015
  • Japan's Amari says pushing through Abenomics in the top agenda
  • China will lower capital requirement for investments - BBG

If I had to sum up the session I would say it started by looking a bit wonky, then it went a bit wonky, then it went really wonky

It's wasn't looking too good in Asia as I sat down and after the RBA announcement non-event we started to go down hill. It looked to be the normal following of stocks and usual China jitters but the Nikkei tipped over in the final hour and a half of trading and dropped nearly 450 ticks to finish on the lows

USDJPY promptly followed suit and that turned sentiment across the board to risk of. We tried to find solid ground at 120.30-ish but that didn't last and soon we were on the slippery slope to under 120.00. Poor manufacturing in China spread to poor manufacturing in Europe and one by one the individual countries posted sticky number. There were a couple of exclusions, namely Germany and the main number but that wasn't enough to turn the tide, Further lower we went to 119.60 before another bounce back to near 120.00, before another drop to the lows at 119.54, and another bounce back to 120.25. As I right the wrap we're trying to hold above 120.00 at 120.10 as we take a breath ahead of the US day

EURUSD is the currency of choice when the cups and saucers go in the air and so off we went towards 1.1300. We ummed and ahed for a bit before the pace picked up and 1.1332 traded the high. The PMI's didn't really sort the euro out and even good news from Italian and Eurozone unemployment couldn't shake the tree that much. It's hard to see the wood for the trees between European fundamentals and the global hotchpotch we're in. We're down from the highs to 1.1265 after testing 1.1250 but are we down on the data or on the after effects from the risk move?

GBPUSD was back from the usual washout bank holiday and looked to be taking things easy. It mildly followed the euro and then got a pie in the face with the UK manufacturing PMI. Employment posting it's first loss in 26 months added to the softer number and we got walloped down to 1.5310 from 1.5350. We'd already just come from 1.5400 so a bigger move overall. The pound still doesn't know what to do with itself and we crawled back to 1.5370 before tipping over again just now to 1.5330

Commodity currencies tried to take on the anti dollar sentiment but couldn't make it pay. Lagarde popped up to calm things down by saying that Asia growth would be weaker than expected and lower commod prices would persist. That was enough to pull the rug out from under AUDUSD and from just under 0.7120 we fell to 0.7065. A similar picture prevails in the kiwi

While the falls in stocks and risk isn't close to the levels we saw last week this week feels different. Markets tried to shake off last week but they all seem to be taking things more seriously. If these moves continue through the US session then there's a strong case to say that we've seen one hell of a dead cat bounce last week

US manufacturing is the highlight in the upcoming session and it maybe the markets saviour or the nail in the coffin