Early FX traded in a thinner liquidity environment than usual with New Zealand markets, usually the first to open in the world on a Monday, closed fo
Early
FX traded in a thinner liquidity environment than usual with New
Zealand markets, usually the first to open in the world on a Monday,
closed for a holiday.
The
news flow early was dominated by the OPEC+ decision to extend cuts, but also outlining a plan to begin trimming them back from October. The
details are in the post above. The response from analysts (and
traders) was mixed, with some arguing the decision was bearish for
the oil price while others took the opposite, bullish, side. Price
action was similar, with oil opening and trading a little lower than
its Friday close, before turning around and trading a little higher
and then dribbling back to be little changed as I update.
The
data of most note today was from China, the second of the two
manufacturing PMIs. On Friday we had a poor official, National Bureau
of Statistics (NBS), manufacturing PMI while today’s from
Caixin/S&P Global was much better. The Caixin PMI has been
stronger than the official PMI in recent months. Of course, the two
are very different surveys, that from Caixin is less focused on
state-owned enterprises, with a greater representation of private
sector and export-oriented firms. The result showed manufacturing
activity in May grew at the fastest pace in about two years. Strong
production and new orders featured.
We
had mixed data from Japan, with the manufacturing PMI for May
expanding for the first time in a year (see bullets above).
From
Australia we had a couple of developments, with minimum and award
wages announced to increase by 3.75% on July 1 (last year’s rise
was 5.75%). The announcement came from the country’s Fair Work
Commission (FWC). The FWC said the cost-of-living wages facing
households was its primary consideration in making that decision, and
that the increase was consistent with forecasts of inflation
returning to target next year. This should go some way to easing
Reserve Bank of Australia concern about rising wages as another
stimulus it must counteract in its struggle to lower sticky high
inflation. Also from Australia today the
Melbourne Institute’s Australian inflation gauge. This
rose
0.3% m/m
and 3.1%
y/y.
The y/y is the slowest in 21 month.
As
for major FX, rates traded in a narrow range-bound fashion only.
Regional equities traded stronger, mainland China being a laggard
though.
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