FXStreet (Mumbai) – The Australian dollar was a clear winner in Asia, riding higher after forecast-beating GDP data surprised markets on the upside. While its OZ counterpart keeps losses after discouraging Fonterra dairy auction results. While USD/JPY extends its corrective slide on broad US dollar weakness following recent downbeat US macro data.
Key headlines in Asia
Australia’s GDP Q1 higher-than-expected
China HSBC China Services PMI climbed from previous 52.9 to 53.5 in May
Australia AiG Performance of Services Index fell from previous 49.7 to 49.6 in May
Dominating themes in Asia – centered on JPY, AUD, NZD
A low key affair in Asia, with most Asian equities trading lower tracking weak overnight cues from Wall Street. While broad based US dollar weakness following renewed optimism on Greece solution and below estimates US factory orders continue to pressure USD/JPY, with the major hovering around 124 handle.
The Aussie maintained a bid tone this session, boosted by upbeat Aus Q1 GDP numbers which unexpectedly beat market expectations. Australia’s economy grew 0.9% in the March quarter, against forecasts of GDP growth of 0.7% in Q1, after the economy grew only 0.5% in the December quarter. While NZD/USD remained pressured largely on the back of disappointing Fonterra’s dairy auction results which revealed prices of dairy had dipped over the last two weeks.
Heading into Europe – centered on EUR, GBP
A busy European session ahead, with European Central Bank (ECB) Governing Council Meeting likely to be the main event followed by much anticipated ECB Chief Draghi’s press conference. Markets will be watching closely for President Draghi’s latest thoughts on the effectiveness of the Bank’s QE programme and the ECB’s role in a possible deal for Greece.
Greece and the current status of ongoing debt negotiations with its creditors — the ECB being one of them — will likely be at the center of the Governing Council’s deliberations.
On the data space, results from the euro zone’s retail business in April are awaited with a projected expansion of 0.6% from -0.8 reported in March, while 1.8% growth is projected when measured annually.
The euro zone will also report its April labor data. The rate of registered unemployed in the region was 11.3% in March, and it is expected to decline to 11.2% in the fourth month of 2015.
From the British economy, we have Services PMI report which expected to show a decline in the reading to 59.2 in May from 59.5 booked in April.
Later in the North American session, we will see the release of the April trade figures, where the dominant theme will be the reversal of the massive March spike in the deficit. Markets have predicted a $44.2 billion shortfall for April.
Also, ADP non-farm employment change which is considered as a proxy for the NFP figures is due for release later in the US session. The Beige Book will be published later on which will offer more detailed evidence about the state of the economy in various regions.
(Market News Provided by FXstreet)