We’re off to a very mixed start to the new month, with trades responding to mixed manufacturing PMI reports.
The UK showed the biggest improvement, which has sent GBP higher but also dragged on the FTSE as it strengthens the case for raising interest rates earlier in 2016 ahead of this week’s Bank of England meeting.
Continental Europe results were indecisive with a number of minor misses and a few minor beats. Norway and Greece showed the biggest improvement. SEK continues to rally on speculation the Riksbank may be done cutting interest rates even through comments from the central bank that they remain open to further cuts.
Asia Pacific stocks fell after manufacturing PMI for China stabilized below 50, causing some stimulus speculation to subside, Australia and India PMI fell back close to 50. More reports have been circulating suggesting China may adopt a 6.5% annual growth target for the next 5 years. AUD is rallying after a big leap in building approvals adds to the case for the RBA not to cut rates at tonight’s meeting.
North American markets are holding steady awaiting manufacturing reports from this side of the Atlantic. CAD is off slightly with crude oil falling back today. US ISM PMI may attract significant attention with traders looking to see if the big jump in Chicago PMI announced on Friday translates to the national figure.