A$ Underperforming Again On Weaker China Data, BoE Expected To Cut Rates

The risk-sensitive Aussie is underperforming during APAC trading today as HK/China equities sell off following a weaker-than-expected China Caixin manufacturing PMI. This data also ended the US dollar sell off which followed Fed Chair Powell’s dovish comments (USD index is flat). AUDUSD is off its intraday low of 0.6524 to be down 0.1% to 0.6533.

• AUDJPY is down 0.4% to 97.74 after a low of 97.20, as the yen continues to benefit from Wednesday’s BoJ hike and flight-to-quality flows.
• AUDNZD is down 0.3% to 1.0967 after a high of 1.1004, as rate expectations narrow. AUDEUR is down 0.2% to 0.6032 and AUDGBP -0.1% to 0.5081.
• China’s manufacturing Caixin PMI for July fell to 49.8, signalling a slight contraction in activity, after 51.8 and expectations of 51.5.
• Equities are mixed with the ASX up 0.4% but the Hang Seng -0.3% and CSI 300 -0.5%. The S&P e-mini is rallying and up 0.6%. Oil prices are off their intraday highs but still up with WTI +0.6% to $78.40/bbl. Copper is 0.1% higher and iron ore is down to $101-102/t.
• Later US jobless claims, July manufacturing ISM/PMI, Challenger job cuts and Q2 productivity/ULC print. The BoE decision is announced and a 25bp rate cut is expected. There are also European July manufacturing PMIs and euro area June unemployment.