Disappointing Caixin M'fing PMI Shrugged Off, Safe Havens Lose Ground

The yuan showed limited reaction to the first contractionary print of China's Caixin Manufacturing PMI since April '20, with spot USD/CNH posting a mere short-lived blip higher. The rate had registered some gains earlier, in tandem with an uptick in the DXY. The PBOC also failed to give any directionality to the redback, as the daily fixing of their USD/CNY mid-point fell in line with sell-side estimate.

• Traditional safe haven currencies traded on the back foot, as most Asia-Pac equity benchmarks advanced in sync with U.S. e-mini futures. USD/JPY extended gains over the Tokyo fix before stabilising around Y110.20.
• Australian Q2 GDP came in stronger than expected, but AUD was rather unfazed and AUD/USD continued to stick to its narrow range.
• Mild selling pressure hit the sterling after cable rejected its 200-DMA on Tuesday. Participants kept an eye on the descending 50-DMA, which came into contact with that 200-DMA, in what may soon result in the formation of a death cross.
• A deluge of PMI readings from across the globe, U.S. ADP employment and construction spending take focus on the data front, while Fed's Bostic & ECB's Weidmann are set to speak.