Asian markets move lower after Chinese PMI disappoints
Asian markets moved slightly lower today after disappointing numbers. In China, the manufacturing PMI number for February was 49.2. This was lower than the consensus estimates of 49.5. It was also the third month of straight declines, which is an indication of the softening of the Chinese economy. A PMI figure of below 50 is an indication of contraction. The non-manufacturing PMI for the month was 54.3, which was also lower than the expected 54.5.
The Japanese yen was little moved against the USD after disappointing industrial numbers. In January, the industrial production declined by a MoM rate of 3.7%. This was lower than the expected decline of -2.4%. In December, the industrial production had declined by 0.1%. Retail sales in January rose by 0.6%, which was also lower than the expected 1.4%. These numbers show that the world’s second-largest economy is having significant challenges.
The EUR/USD pair was relatively unmoved in the Asian session. The pair will be watched closely today as the EU and US release important data. In the afternoon, US will release the Q4 GDP reading, which is expected to show that the economy expanded by 2.6%. This is after expanding by 3.4% in the third quarter. The initial jobless claims are expected to improve by 221K while the continuing jobless claims are expected to increase by 1,733K. In Europe, the February CPI for Germany is expected to improve to 1.5% while the HICP is expected to remain unchanged at 1.7%. The French and Spanish CPI are expected to remain unchanged at 1.1% 0.9% respectively.
The EUR/USD pair was little moved at 1.1377. On the 4-hour chart, this level is slightly above the 21-day and 42-day moving averages while the RSI is currently at 57. The signal line of the MACD has remained unchanged at a level above the neutral line while the strength of the Bulls Power is a bit weak. The pair is expected to remain along these levels, but this could change after the release of US GDP numbers.
The USD/JPY pair pared the gains made on Tuesday, when the pair reached a high of 111.07. It is now trading at 110.87, which is along the 14-day EMA. This level is also between the upper and middle line of the Bollinger Bands while the momentum indicator is moving lower after peaking yesterday. The pair will likely be a bit volatile today as traders watch out for the talks between North Korea and the United States.
The GBP/JPY continued to rally as traders lowered the likelihood that the UK will leave the EU without a deal. The pair reached an intraday high of 148.07, from a low of 133 in January. On the eight-hour chart, this price is slightly close to the important resistance level of 149.78. It is also above the 14-day, 21-day, and 200-day moving averages while the RSI has moved to the overbought territory. The pair will likely continue the upward trend today.