It is a mixed bag as North Americans open this Thursday morning following weaker Eurozone and Chinese economic data. The euro is rising as we go to print after a 0.50% decline in the wake of weaker than expected German private sector growth and French business activity. Factory activity in China contracted at its fastest pace in a year this April which got things moving lower as the Asian session kicked off. The flash PMI fell to a one-year low of 49.2 from 49.6, below expansionary territory as authorities try to rebalance its economy away from exporting to relying more on domestic spending. Earnings season has kicked off in the US and the results have been varied so far, with companies such as Texas Instruments and Facebook missing earnings estimates (with FX being blamed for some), weighing on US futures this morning.
Despite the actions of the People’s Bank of China, which surprisingly slashed its requirement of the cash banks must hold on reserve, it’s been a fairly uneventful week during Asian trading hours. The yen has been retreat for most of the week and has continues its sell-off today as USDJPY finally surpassed the 120 level again. Global equities have all advanced on this week’s surprise RRR cut by the PBOC, as China searches for growth in 2015. The New Zealand dollar was the biggest loser overnight as RBNZ Assistant Governor John McDermott made some waves in a speech, explaining that the central bank would not be considering any increase in interest rates at present. Mr. McDermott also address recent kiwi strength directly, as a rising dollar is unwelcome as export prices fall.
Read the rest of the article Markets Holding Breath