Daily Morning Report & Daily Technical Levels 02/11/2015

Daily Morning Report 02.11.2015

The Aussie gained in Asia on Monday as the Caixin survey on manufacturing came in better than expected. USD/JPY changed hands at 120.44, down 0.15%, while AUD/USD traded at 0.7136, flat, from negative territory before the Caixin survey. The Aussie’s fortunes are closely linked to commodity exports to China. The Caixin manufacturing index for October rose to 48.3 with against 47.5 expected and up from last month’s 47.2. In Australia, the AI Group manufacturing survey fell 1.9 points to 50.2. The TD Securities-Melbourne Institute inflation gauge for October was unchanged from the previous month as tradable inflation fell for the first time in four months and the pace of non-tradable inflation remained stable. Also in Australia, building approvals rose 2.2%, better than the 2.0% gain seen, and supporting the Reserve Bank’s forecast for continued growth in building construction. The RBA’s latest view on housing construction will be seen in the quarterly Statement on Monetary Policy due Friday. China’s weak start to the fourth quarter was evident by the two official PMIs released over the weekend, suggesting that the economy is showing little response to this year’s monetary easing. The official manufacturing PMI for October, released on Sunday by the National Bureau of Statistics and the China Federation of Logistics and Purchasing, came in with a reading of 49.8, the same as September, below the 50 level that marks contraction and expansion. The official non-manufacturing PMI, also released on Sunday, slipped to 53.1 from 53.4 in September, the lowest reading since December 2008. The PMIs offer the latest evidence that the economy is under increasing stress. China’s biggest industrial companies are coming out with lousy nine-month results. Premier Li Keqiang gave words of reassurance over the weekend that the economy can maintain “medium to high-level growth” for some time, and that China’s consumption has “a lot of room to grow.” But even after the PBOC’s interest-rate cut last month, the sixth in under a year, real interest rates for borrowers are still high. The reserve ratio for banks is also high — 17.5% for the major banks – so the PBOC has a lot of scopes to reduce them even more. But the central bank may prefer to use more targeted measures through its medium-term lending facility and standing lending facility. The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was last quoted down 0.15% at 96.85. Last week, the dollar fell against the other major currencies on Friday as investors took profits in the wake of a rally after the Federal Reserve indicated that it could raise interest rates at its December meeting. The dollar came under pressure after data on Friday showing that U.S. consumer spending ticked up just 0.1% in September, the smallest gain in eight months. The data tempered expectations for higher interest rates before the year’s end. The BoJ lowered its growth and inflation forecasts, however, fueling expectations that it could ramp up its stimulus program next month. The single currency was boosted by data showing that the eurozone emerged from deflation in October. Data on Friday showed that the eurozone consumer price index edged up to zero last month after falling 0.1% in September, but lower energy costs continued to weigh. In the week ahead, investors will be looking ahead to Friday’s U.S. employment report, for indications on the strength of the economy. Central bank announcements in the U.K. and Australia will also be in focus. On Monday, Switzerland is to release data on retail sales. The U.K. is to produce a report a manufacturing activity. In the U.S., the Institute of Supply Management is to release data on manufacturing activity.

 

02.11.2015 – 07:10 GMT+2

Daily Technical Levels

EUR/USD

GBP/USD

USD/JPY

AUD/USD

USD/CAD

USD/CHF

R3:

1,1102

1,5502

121,08

0,7212

1,3149

0,9945

R2:

1,1067

1,5467

120,73

0,7177

1,3114

0,9910

R1:

1,1042

1,5442

120,48

0,7152

1,3089

0,9885

S1:

1,1012

1,5412

120,18

0,7122

1,3059

0,9855

S2:

1,0987

1,5387

119,93

0,7097

1,3034

0,9830

S3:

1,0952

1,5352

119,58

0,7062

1,2999

0,9795