NZ Econ Slows, Onto China PMI
The British government delivered a budget that balanced austerity and tax cuts, as expected. The New Zealand dollar is lagging after soft GDP data and the yen is the top performer. In China today, HSBC will deliver its March PMI flash estimate. Wednesday's Premium trades include AUDUSD, AUDCAD, EURUSD and silver. See below for detail.
Early US trading was once again characterized by choppiness and rapid news not overly tied to fundamentals. EUR/USD tumbled to 1.3179 from an opening level of 1.3230. Concerns about the Spanish economy and rumors that Germany is looking to pull the plug on ECB liquidity hampered periphery debt.
The focus was on the UK budget but Osborne delivered essentially what was expected after numerous leaks. One positive surprise was a lower-than-expected borrowing forecast for the year ahead. The gilt market rallied in approval but cable was unmoved. Measures in the budget will cut tax rates while hiking taxes on real estate transactions and cigarettes. Fitch responded to the budget, saying its credit neutral.
Testimony from Bernanke and Geithner was leaked yesterday so there were no surprises. In the Q&A, both harped on the need to reign in deficits. The lone US economic existing homes sales which paced at 4.59m compared to the 4.62m expected.
Early in Asia-Pacific trading, New Zealand revealed that the economy grew just 0.3% in Q4, short of the +0.6% consensus. Third quarter growth was also revised lower to +0.7% from +0.8%.The kiwi fell to a one-week low at 0.8100 after the release, dropping a half cent.
The focus will be on the HSBC flash China manufacturing PMI at 02:30 EST. The data point has not been a great predictor of official numbers recently but it still holds sway in the markets, especially due to heightened concerns raised earlier this week by BHP Billiton.
WEDNESDAY's PREMIUM INTERMARKET TRADES on GBPUSD, EURUSD, AUDUSD, AUDCAD, and silver are found here: http://www.ashraflaidi.com/products/sub01/access/?a=619 Non Subscribers can click here: http://www.ashraflaidi.com/products/sub01/
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