Financial Market Review for May 02, 2018 Economic data released through the Asian session this morning was on the lighter side, with stats limited to 1st quarter employment numbers out of New Zealand and China’s April manufacturing sector PMI number. For the Kiwi Dollar there was finally some good news, with New Zealand’s unemployment rate falling from 4.5% to 4.4% in the 1st quarter, employment change rising by 0.6% following the 4th quarter’s 0.5% rise. The Kiwi Dollar moved from $0.70052 to $0.70065 upon release of the figures, recovering from $0.69 levels late in the day, before moving to $0.7010 at the time of writing, up 0.07% for the session. For the Aussie Dollar, following the official government figures from earlier in the week that reported a slight softening in manufacturing sector activity across the SoEs, this morning’s Caixin Markit survey reported an uptick in manufacturing sector growth, the PMI rising from 51.0 to 51.1 in April. While the headline number was marginally better, a slower increase in total new work, driven by falling export sales will be of concern, though it’s unclear how much influence the recent trade spat has had, with manufacturing companies continuing to reduce staff numbers in spite of rising backlogs. The Aussie Dollar moved from $0.74822 to $0.74921 upon release of the figures, which will have eased near-term fears of a material slowdown in the Chinese economy going into the 2nd quarter, though the impact of the trade spat between the U.S and China was evident in the export and new order numbers. At the time of writing, the Aussie Dollar was up 0.19% to $0.7504, the gains coming off the back of a softer U.S Dollar this morning and bounce in commodity prices. In the equity markets it was a mixed bag, with the Nikkei and Hang Seng in the red, while the CSI300 and ASX200 made progress through the session, as the markets prepared for today’s FOMC monetary policy decision and the all-important release of the FOMC Statement. For the EUR, it’s a busy economic calendar for the day ahead, with key stats scheduled for release including finalized April manufacturing sector PMI numbers and the Eurozone’s March unemployment rate and 1stquarter GDP numbers. Barring material deviation from prelim figures, focus this morning will be on the 1st estimate GDP number, with any softer than forecasted numbers likely to see the EUR slip back through to $1.19 levels, the markets already expecting some slowdown following the prelim numbers out of France at the end of last week. At the time of writing, the EUR was up 0.09% to $1.2010, the EUR recovering from its first visit to $1.19 levels since early January. For the Pound, economic data scheduled for release out of the UK is limited to April’s construction PMI that is forecasted reflect a sector bouncing back into growth following March’s contraction. March’s contraction had been attributed to adverse weather conditions, though disappointing manufacturing PMI numbers released on Tuesday suggest that there may have been more to it. A rebound would provide the Pound with some support, but not enough to shift sentiment towards monetary policy.
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