Weaker Chinese PMIs Reflect Impact of Recent Covid Lockdowns

AUD

The AUD had mixed performance overnight and trades at marginal differences against most major currency pairs this morning. Asian Equities were largely down in the session with the Nikkei down -0.7% while the Shanghai Comp dipped -0.4%. The ASX 200 inches -0.2% lower on Thursday following news that Australia would impose a further 35% tariff on Russian imports. Commodities were mixed with Iron Ore up 1.1%, while Copper, Silver and Gold all took a breather from their recent bid tone. There was a lack of domestic data overnight, in the Asian session, China Federation of Logistics and Purchasing reported a monthly PMI. which printed at 49.5, lower than the estimate and previous print. It’s worth nothing that Australia is the leading exporter to China and the damage resulting from the latest Covid lockdowns is becoming evident. Little data headed into the weekend as market participants look toward a busier US Session with ISM and Employment data being the key mentions before the week is up.

USD

The AUDUSD pair dipped below the 0.75 handle again on Thursday after failing again at resistance, with the pair trading at a rate of 0.7483 at the time of writing. US Equities finished the session largely in the red with both the Nasdaq and the Dow Jones down -1.5% while the S&P finished closely behind down -0.9%. Yesterday’s headlines from Putin who said that as of April 1st, Foreign buyers of Oil would need to pay in Rubles, which saw U.S saw crude prices fall 6.4% to $100.8. US weekly jobless claims data was mixed with initial claims rising slightly to 202k to come in higher than estimates of 196k while continuing claims fell to 1.307mio to come in lower than estimates of 1.340mio. February Core PCE was 0.4% MoM as expected with the YoY number at 5.4% compared to expectations of 5.5%. No reaction to the data. Looking ahead, it’s a busier day to close out the week with US Employment, and ISM Manufacturing PMIs for March being the key focus for traders.

EUR

The AUDEUR seesawed in the late trade overnight, trading as low as 0.6692 before rebounding back above the 0.67 handle and trades at a rate of 0.6760 at the time of writing. European Equities closed lower in the last trading day of March with the DAX down -1.3% and the CAC was down -1.2%. In the event on Thursday and continuing the theme of inflation, French CPI for March came in at +1.6% MoM and +5.1% YoY, higher than expectations of 1.5% and 4.9% respectively. Released a little later, Italian CPI was softer than expected at 2.6% MoM and 7.0% YoY, both lower than expectations by 0.2%. Little in the way of data headed into the weekend with EuroZone CPI data for March being the only data of note.

GBP

AUDGBP remained relatively subdued in the session and trades only a handful of pips below Thursday’s levels, currently trading at a rate of 0.5694 this morning. The FTSE finished the day in the red at 7,516 points, to -0.8%. In early data on Thursday, the UK economy grew by slightly more than expected in the fourth quarter of last year, according to government figures. UK GDP rose by 1.3%, compared to estimates of a 1% rise. The annual figures showed that the UK GDP rose by 6.6% in Q4 vs. 6.5% previous and 6.5% expected. For the 2021 full year, the economy expanded by 7.5%, the most since 1941, recovering from a lower base, having contracted 9.4% in 2020. To the data this evening, UK’s Manufacturing PMIs for March will be the focus for traders and should act as an economic indicator amid the ongoing geopolitical tensions in the EU.

NZD

The AUDNZD bucked the trend to trade marginally higher this morning with the pair trading at a rate of 1.07986 at the time of writing. In the absence of any moving macro data, the Kiwi has held up reasonably well despite the riskier toned environment. It’s a quieter day domestically with no data of note. However, market participants look to the US docket for directional bias, which features US ISM Manufacturing PMIs for March, an indicator for growth and Employment data.