LONDON (MNI) – The UK manufacturing sector saw only minimal
expansion in April, with the pace of growth markedly weaker than
expected.

The headline Markit/Chartered Institute of Purchasing and Supply
index from Reuters fell to 50.5 in April from 51.9 in March, hit by a
sharp fall in export orders, which saw their steepest decline since May
2009.

Analysts’ median forecast was for a 51.6 outturn. The 50.5 reading
shows the sector only just above the 50 contraction/expansion dividing
line.

Sterling’s rise on its trade weighted index and Eurozone weakness
appear to be hitting export demand. On April 30, the Bank of England
Sterling Effective Exchange Rate Index was up 1.9% on a month earlier.

Markit’s purchasing managers indices are not, however, a reliable
guide to the official growth data.

Markit said its Q1 PMIs showed were consistent with 0.5% quarterly
growth in Q1. The first official estimate of Q1 GDP, however,
showed a 0.2% contraction, putting the economy back into technical
recession.

Today’s release is the first of the UK Q2 PMIs and shows the
manufacturing sector getting off to a faltering start.

–London newsroom: +44 207 862 7491; email:drobinson@marketnews.com

[TOPICS: MABDS$,M$B$$$]

Still not far off the day’s highs of around 1.3279 which i guess took out the talked about barrier at 1.3275.  I can’t confirm but suspect some other powers to be might have offering interest up at the highs, possibly swiss related  as EUR/CHF and USD/CHF continue to be put under  pressure.

There’s still talk of a 1.3300 barrier and likely heavy offers ahead of the level.

We’re presently sitting at 1.3269

Down sharply and lowest since Dec., with Eurozone weakness to blame which has hit manufacturing.  UK exports  plunged to levels not seen since May 2009

April New orders index fell to 49.2  from 52.4 in March…, 1st  contraction since Nov 2011

Cable dips under 1.6200 and EUR/GBP pushes up to day’s highs around  0.8196

Hit a 4 week low at the level and this is also where there has been talk of SNB bids amongst others . One to watch… with a break down here targeting a barrier at 0.9000.

EUR/USD: 1.3200, 1.3235, 1.3250, 1.3300, and 1.3335

USD/JPY: 79.75, 80.00, and 80.40

EUR/JPY: 105.75, 106.00

GBP/USD: 1.6200, and 1.6250

USD/CHF: 0.9065 and  0.9080

AUD/USD:  1,0225, 1.0250, 1.0260, 1.0330, 1.0400 and 1.0450

Been down as low as 79.64 just now, with  the AUD/JPY collapse from around  83.15  not helping the cause..

Dollar bids sit down in the 79.50/60 zone with sell stops reportedly set on a break.

Similar talk of stops now through 82.00 in AUD/JPY which has seen a low of  around 82.12 recently.

Looks like the macro buyers are having a profound impact…!!.!

Just carved out a day’s low of 1.0312  and as i mentioned earlier there are some buyers sitting around in the 1.0300/10 level for the moment and some more towards 1.0280 from exporters I’m  now being told  by a contact in Sydney.

Topside may well be restricted to  1.0345/50 tech resistance (21 dayMA at 1.0346) and  1.0355/60 (1.0357 -200 day MA)

I know there are some religious readers of this man, (including me sometimes, but i tend to go to the sport pages first….)

Anyway today’s latest spiel from the man is  “A Glimmer of hope for the austerity wasteland of Southern Europe”

At least till the US get in… Haven’t heard much in the way of orders but think we all know the potential range  of 1.3210-70 should cover things for now.

There some  tech resistance around 1.3160 just now at the 21 day MA, but feel this pair will be cross driven for the morning and  wouldn’t be surprised to see some profit taking in EUR/AUD after that big spike post RBA.  A break above 1.2900 in the cross could however be  interesting but it stopped short there at the beginning of April.

Just getting reports on the bush telegraph that macro type names are now buying AUD/USD

We’re sitting at 1.3255 in the EUR and 1.0330 in the AUD

Doesn’t bode well today with Golden week, holiday’s in Europe and little on the data front this morning barring the UK April Mfg PMI at 0828GMT.

AUD’s at least given players something to chew over with a slightly surprising 50 bps cut, but seems demand remains despite growing concern now in some quarters over Chinese growth prospects and  despite a marginally improved China April  PMI of 53.3 from 53.1.

CitiFX’s G10 Strategist Todd Elmer remains resolute in his view that this AUD dip presents a buying opportunity. Stating ” Since AUD trades more closely to external factors than it does domestic ones and has not been moving in line with either the level of AUD rates or interest rates spreads with the rest of the world, the decision itself is not likely to drive a breakdown beneath recent ranges”

Some technical support now seen in AUD/USD in the 1.0300/10 area  ahead of bids at 1.0250/60

Still above the 50.0  but growth  showing contraction and hardly surprising after recent German and EU PMI’s

Despite Mfg output falling to 48.7 from 52.8 in March

Morning all,  Gerry will be a little late this morning,

Please stick any ideas you’d like to share with your fellow readers here…..

– Japan Apr New Vehicle Sales +92.0% Y/Y Vs Mar +78.2%
– Japan New Vehicle Sales Post 8th Straight Y/Y Rise in Apr

TOKYO (MNI) – New vehicle sales in Japan posted an eighth straight
year-on-year rise in April on government subsidies and a recovery from a
plunge caused by the March 2011 earthquake disaster, data released by
the Japan Automobile Dealers Association on Tuesday showed.

New vehicle sales stood at 208,977 units in April, down from
497,959 in March and 333,213 in February, but the April sales figure
was still 92.0% higher than a year before, when the earthquake caused a
major supply chain breakdown.

The increase followed +78.2% y/y in March, +31.9% in February,
40.7% in January and 23.5% in December. Sales marked the first
year-over-year gain in 13 months last September.

In December the government revived subsidies for buying
low-emission vehicles. The program was first finished in September 2010,
which caused a year-long stagnation of domestic vehicle sales.

Separately, the Japan Mini Vehicle Association reported that
domestic sales of new small vehicles (with engine displacement of less
than 660 cc) rose 96.0% y/y to 150,654 in April, the seventh straight
year-on-year rise, following a 60.5% gain in March.

tokyo@marketnews.com
** Market News International Tokyo Newsroom: 81-3-5403-4835 **

[TOPICS: M$J$$$,M$A$$$,MAJDS$]

EUR/AUD has been a big mover today, up 1% on the session. I think I saw some EUR/AUD longs in our trade ideas this morning, so well done to you clever people.

Gerry will be along soon and I’ll be a bit late tomorrow as the dentist chair beckons.

Whilst not totally unexpected, (the bookies are never too far wrong!), the normally conservative RBA has made a significant move to try and waken up the subdued Australian economy and housing market. The preliminary data which they are receiving is obviously worrying them, and with inflation not really an issue, then have taken a very aggressive line.

The AUD/USD has only fallen by 50 pips despite the RBA’s move, which shows just how strong the Sovereign demand remains; they don’t seem to care.

USD/JPY may come under some pressure now if AUD/JPY selling intensifies.

• Inflation has moderated and growth has weakened

Full statement

Those bids I mentioned earlier in AUD/USD at 1.0350 are still there and are getting filled at the moment.

• China’s official PMI rose slightly in April to 53.3 from 53.1 in March
• Australian Q1 house price index -1.1% QoQ, showing house prices falling faster than expected
• Japans MOF closely monitoring FX market
• Feds Fishe: Fed has done enough
• South Korean trade surplus 3.15 billion in April, down from revised $3.5bln in March
• Thai CPI lower than expected at 2.5% YoY, with lower than expected food prices
• Dutch April PMI 49.0 down from 49.6 in March
• Nikkei -0.9%, All Ords +0.7%; most centres closed for Golden week celebrations
• Gold $1667/oz; Oil $104.75/bbl

Very quiet early session and the Chinese PMI did nothing to liven it up. The market is now waiting for the RBA decision and statement in about 30 minutes time.

AUD/USD has been the most active pair but the fact that it only traded around a 30 pip range tells the whole story. The market has priced in a 25bps rate cut with some talk of a possible 50bps cut. Range pre-RBA of 1.0400/29

USD/JPY has also done very little inside a 15 pip range, 79.78/93, also ignoring the comments from the MOF. The Japanese financial markets are open today and tomorrow, but they are much less active than normal due to Golden week.

EUR/USD traded in a 5 pip range for the first 5 hours and hasn’t done much since. Cable traded 1.6225/40 and EUR/CHF looked normal for a change with its 5 pip range!

Reserve managers and Asian central banks are the most likely sources of these bids but we can expect these orders to be cancelled just prior to the RBA, in case of a 50 bps cut.

Edit: Stop-loss sell orders reported below 1.0390 with bids also reported near 1.0360/70

The head of the Japanese Ministry of Finance, Mr Nakao, is watching for signs that speculation could be behind the rise in the Yen. They are closely monitoring the market so as to act in a timely and appropriate manner (Reuters newswires).

I’m without doubt the world’s most unsuccessful NZD trader so I always leave it alone but some others are a lot more successful at it. I’ve just been speaking with a big professional trader, who is a bit unusual in that he is quite short-term in his outlook. He sold yesterday at .8230 and he sold again this morning near .8185. He’s quite technical in his analysis and he feels a downside break is imminent, with stop-loss orders reported below .8160 likely to help his cause. His target is .8100. I forgot to ask where his stop-loss is but I presume he’ll start trimming if it gets back near .8200. It’s certainly a bit dangerous to be trading intraday around the RBA decision but some people like to live dangerously