ECB in focus this week

<p>Official Chinese manufacturing PMI data showed signs that the recovery is gathering pace as the index came in at 50.8, above the consensus forecast of […]</p>

Official Chinese manufacturing PMI data showed signs that the recovery is gathering pace as the index came in at 50.8, above the consensus forecast of 50.6. Media reports suggest Chinese officials are looking at further possible options for ‘targeted monetary loosening’. The HSBC manufacturing index backed up the stronger official data, printing a reading of 52.4 and showing an improvement in domestic activity. AUD initially traded higher towards 0.9320 on the upbeat Chinese data but the domestic releases have highlighted concerns for the GDP release on Wednesday as building approvals collapsed to -5.6% versus a forecast of +2%, taking the lifestyle currency back to the 0.9250 level.

News from Tokyo has seen USD/JPY trade above 102 on media speculation over the weekend that the Japanese government is considering a higher ceiling and an extended period of tax-beneficial investment accounts as Dai-ichi Life Insurance are preparing to acquire American life insurer Protective Life for an estimated $4.87 billion.

This week market focus will be on the ECB meeting on Thursday where expectations are very high for a significant policy adjustment, with the CFTC data showing the position adjustment has an awful lot priced in. The risk is another disappointment as the market will at least need to see cuts in the re-financing and deposit rates along with a targeted measure in the form of another LTRO initiative as an end to SMP sterilisation all seem to be in the price.

Today we get the latest manufacturing PMI data from Europe, UK and the US along with lending data from the UK and the ISM reading from across the pond.

 

EUR/USD

Supports 1.3580-1.3560-1.3520 | Resistance 1.3675-1.3700-1.3730

 

 

USD/JPY

Supports 101.50-101.20-100.75 | Resistance 102.15-102.40-102.85

 

 



GBP/USD

Supports 1.6720-1.6690-1.6670 | Resistance 1.6780-1.6800-1.6830

 

Join our live webinars for the latest analysis and trading ideas. Register now

GAIN Capital UK Limited (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.