Traders eagerly await PMI data from around the globe

15.29 AEDT, Monday 22 October 2012

Traders eagerly await PMI data from around the globe
By Tim Waterer (Senior Trader, CMC Markets)

The Australian Dollar (AUD) followed the general tone of risk assets lower after Friday’s slump during the US session. Today the AUD held its ground above the 1.03 level however with sentiment having taken a significant hit and with local CPI data due Wednesday, which may open the door for a November rate cut, the AUD is at more risk of slipping to below 1.02 than it is of racing past 1.04 in coming days. Any bounce-back performance by US equities could see the AUDUSD rate reclaim 1.0350. However, with a raft of PMI data due from Europe and China on Wednesday traders may be cagey in the interim for fear of the manufacturing data disappointing.

Sharemarkets across Asia were playing catch-up, or rather catch-down, in response to what happened in the US on Friday, however the downside moves were more restrained in percentage terms. On reflection it seems traders took the view that the sell-off on US equities was perhaps a little overdone and was based too much on emotion and memories of the Wall Street crash.

On the Australian market, the mining stocks looked worse for wear courtesy of commodity prices reacting adversely to the Wall Street sell-off. Declines in copper, oil and gold prices dented the appeal of the big miners on the ASX, particularly with a multitude of manufacturing data due mid-week from around the globe which could pose more demand questions. Overall today, whilst the winning streak of the market was snapped the damage could have been worse after traders woke up Saturday morning to see a 200 point decline on the Dow Jones.

http://www.cmcmarkets.com/

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