Feb. 2: MARKET OVERVIEW
Chinese official manufacturing PMI unexpectedly shrank for the first time in nearly 2-1/2 years in January. A separate survey, the HSBC/Markit Purchasing Managers’ Index (PMI), showed on Monday that activity in China’s factory sector shrank for a second month in January.
USD/JPY briefly touched a 2-week low below 117.00 on Monday. The Bank of Japan’s Governor Haruhiko Kuroda said he did not think the recent weakening of the yen was severely hurting the country’s economy. Then demand from Japanese importers helped the US dollar to recover to 117.87. Still, the USD bulls are not very confident after data on Friday showed that American economic growth slowed in Q4.
AUD/JPY hit 11-month low at 90.70 before returning up to 91.50. Canadian dollar is trading on the downside. AUD/USD and NZD/USD are a bit on the upside, but still close to the minimums.
The new Greek government has said that it will not cooperate with the ‘Troika’ of international creditors, and does not plan to seek an extension for its aid package which is set to expire at the end of February. However, there’s no fresh sell-off in the euro: some analysts think that much of bad news on Europe may have been already priced in. EUR/USD is trading in the 1.1300 area.
Here are the important events to watch today: