Daily FX Update, 04 August 2015

v  US’s ISM manufacturing data was slightly weaker than market expectation v  US’s Construction Spending  rise to 0.1% m/m in June v  UK’s Markit PMI manufacturing picked up to 51.9 in July v  Malaysia's Nikkei PMI manufacturing rose slightly to 47.7 in July v  Japan’s Nikkei PMI manufacturing index grew to 51.2 in July

·         US – ISM survey eased to 52.7 in July from 53.5 in June. New orders component rose modestly to 56.5 but the employment and prices paid components declined.

·         US – Construction spending undershot market expectations rising 0.1% m/m in June, although data for April and May were revised higher.

·         US – Headline and core PCE price measures were a little stronger than expected in June. The headline measure rose 0.3% y/y and the core measure firmed to 1.3% y/y from 1.2% y/y in May. Personal spending moderated in June to 0.2% m/m from 0.7% m/m, with the savings rate lifting to 4.8% from 4.6%.

·         UK – Manufacturing PMI picked up to 51.9 in July from 51.4 in June. However, the index remains below its March 2015 high, in part reflecting the strength of the sterling against the euro.

·         Euro area – The final July euro area PMIs were little changed from the preliminary estimates. The overall impression remains one of gradual recovery and an economy that has managed to weather the Greek crisis.

·         Currency – The AUD will be in focus today with a raft of domestic data releases and the RBA Board meeting later in the day. In New Zealand the dairy auction overnight will also be watched, but broad trends are likely to remain on track until the US payrolls report at the end of the week.

·         Equity – US stocks were heavy with the DJIA down 0.5% and the S&P 500 down 0.3%.

·         Rate – US Treasuries rallied, with 10-year yields declining 5.7 bps to 2.15%, following the release of weaker than expected US data.

·         Energy – Crude oil prices declined sharply on Monday as Iran vowed to boost production immediately after sanctions are lifted. Brent oil prices dropped below $US50/barrel for the first time since January.

Precious Metal – Market sentiment continued to remain negative for gold as money managers stayed net-short on bullion for a second Gold traded lower by 0.39% below $US1100 per ounce. 

INDICATIVE MAJOR CURRENCIES Last Close  8.05 am Snapshot        Bid                   Offer Expected Ranges for Today         Low                       High USD/MYR 3.8517 3.8430 3.8750 3.8410 3.8860 JPY/MYR (100) 3.1095 3.1010 3.1360 3.0900 3.1500 SGD/MYR 2.7966 2.7850 2.8200 2.7800 2.8300 EUR/MYR 4.2215 4.2100 4.2470 4.1900 4.2800 AUD/MYR 2.7994 2.7900 2.8220 2.7800 2.8500 GBP/MYR 6.0048 6.0040 6.0420 5.9700 6.0900 USD/JPY 123.87 123.71 124.12 123.31 124.31 EUR/USD 1.0960 1.0800 1.1110 1.0900 1.1010 AUD/USD 0.7268 0.7120 0.7430 0.7230 0.7330