PMI Woes Shoot Euro and Sterling Down; Yen and Dollar Seize the Opportunity
| Action Insight Mid-Day Report 8-23-23 |
PMI Woes Shoot Euro and Sterling Down; Yen and Dollar Seize the Opportunity |
Sterling and Euro faced a sharp drop today after alarming PMI readings unveiled an unanticipated rapid decline in the service sectors of both the UK and Eurozone. The days of service-driven economic growth seem to be in the rearview mirror, with signs indicating probable contractions in the third quarter for both regions. Canadian Dollar also felt the weight, taking a hit after core retail sales showed a larger-than-expected contraction, making it the day's third weakest currency. In a turn of events, Yen emerged as the day's star performer, capitalizing on the notable drops in German and UK benchmark yields. Dollar, riding on the coat-tails of Yen's performance, positioned itself as the second strongest, followed by Swiss Franc. This shift suggests a growing trend towards risk-averse sentiment in the market. Meanwhile, both Aussie and Kiwi present a mixed bag, but display vulnerability against their Dollar and Yen counterparts. Technically, WTI crude oil's break of 79.06 support today suggests that fall from 84.91 has resumed. Deeper decline is now expected as long as 82.15 resistance holds, to 100% projection of 84.91 to 79.06 from 82.15 at 76.30. Decisive break there will bolster that case that whole rebound from 63.67 has finished too, and target74.74 resistance turned support next. Any downside acceleration in WTI might further strain the already-pressured Canadian Dollar. In Europe, at the time of writing, FTSE is up 0.67%. DAX is down -0.09%. CAC is down -0.06%. Germany 10-year yield is down -0.0748 at 2.570. Earlier in Asia, Nikkei rose 0.48%. Hong Kong HSI rose 0.31%. China Shanghai SSE dropped -1.34%. Singapore Strait Times rose 0.45%. Japan 10-year JGB yield is up 0.0058 at 0.677. |
EUR/USD Mid-Day Outlook Daily Pivots: (S1) 1.0809; (P) 1.0870; (R1) 1.0907; More... EUR/USD's fall from 1.1274 resumes today by breaking 1.0832 support. Intraday bias is back on the downside for 1.0609/34 cluster support next. For now, break of 1.0929 resistance is needed to indicate short term bottoming. Otherwise, outlook will stay mildly bearish in case of recovery. | |
| GMT | Ccy | Events | Actual | Forecast | Previous | Revised |
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| 22:45 | NZD | Retail Sales Q/Q Q2 | -1.00% | -0.20% | -1.40% | -1.60% | | 22:45 | NZD | Retail Sales ex Autos Q/Q Q2 | -1.80% | -0.10% | -1.10% | -1.60% | | 23:00 | AUD | Manufacturing PMI Aug P | 49.4 | 49.6 | | 23:00 | AUD | Services PMI Aug P | 46.7 | 47.9 | | 00:30 | JPY | Manufacturing PMI Aug P | 49.7 | 49.6 | 49.6 | | 07:15 | EUR | France Manufacturing PMI Aug P | 46.4 | 45.2 | 45.1 | | 07:15 | EUR | France Services PMI Aug P | 46.7 | 47.3 | 47.1 | | 07:30 | EUR | Germany Manufacturing PMI Aug P | 39.1 | 38.7 | 38.8 | | 07:30 | EUR | Germany Services PMI Aug P | 47.3 | 51.5 | 52.3 | | 08:00 | EUR | Eurozone Manufacturing PMI Aug P | 43.7 | 42.8 | 42.7 | | 08:00 | EUR | Eurozone Services PMI Aug P | 48.3 | 50.5 | 50.9 | | 08:30 | GBP | Manufacturing PMI Aug P | 42.5 | 45.1 | 45.3 | | 08:30 | GBP | Services PMI Aug P | 48.7 | 50.8 | 51.5 | | 12:30 | CAD | Retail Sales M/M Jun | 0.10% | 0.00% | 0.20% | 0.10% | | 12:30 | CAD | Retail Sales ex Autos M/M Jun | -0.80% | 0.30% | 0.00% | -0.30% | | 13:45 | USD | Manufacturing PMI Aug P | 48.9 | 49 | | 13:45 | USD | Services PMI Aug P | 52.4 | 52.3 | | 14:00 | USD | New Home Sales Jul | 708K | 697K | | 14:00 | EUR | Eurozone Consumer Confidence Aug P | -14 | -15 | | 14:30 | USD | Crude Oil Inventories | -2.9M | -6.0M |
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