USD/CNY Fundamental Analysis May 1, 2012 Forecast

Analysis and Recommendation: (close of Asian session)

The USD/CNY is trading at 6.3108. Chinese markets are closed for the May Day Holiday.

 The yuan experienced its biggest daily fluctuation despite the central bank setting central parity at a record high for a second straight day – a sign that the currency is gaining in flexibility.

The People’s Bank of China set the central parity rate at 6.2787 against the dollar, the highest since 2005 when the yuan’s peg to the greenback was scrapped.

The currency fell 0.07 percent to close at 6.3102 per dollar in Shanghai, according to the China Foreign Exchange Trading System. In intraday trading, the yuan dropped as low as 0.53 percent, the first time it had tumbled more than 0.5 percent since April 16 when China doubled the yuan’s daily trading band to 1 percent from 0.5 percent to lend the currency more flexibility.

The central bank sets the central parity rate each day and the value of the yuan can rise or fall as much as 1 percent during intraday trading. The rate usually reflects China’s attitude toward the currency’s value.

Economic Data for April 29-30, 2012 actual v. forecast

NZD

 

 

 

Building Consents (MoM) 

19.8%

 

6.0% 

 

-6.2% 

   

NZD

 

 

 

Trade Balance 

134M

 

445M 

 

202M 

   

KRW

 

 

 

South Korean Service Output  

-1.00%

 

 

 

1.20% 

   

 

KRW

 

 

 

South Korean Industrial Production

-3.1%

 

0.2% 

 

0.6% 

   

 

AUD

 

 

 

MI Inflation Gauge (MoM) 

0.3%

 

 

 

0.5% 

 

 

 

NZD

 

 

 

Business Confidence 

35.80

 

 

 

33.80 

 

 

 

AUD

 

 

 

HIA New Home Sales (MoM) 

 

 

 

 

3.0% 

 

 

 

AUD

 

 

 

Private Sector Credit (MoM) 

0.4%

 

0.3% 

 

0.4% 

 

 

 

SGD

 

 

 

Singaporean Unemployment Rate 

2.1%

 

2.0% 

 

2.0% 

 

 

 

SGD

 

 

 

Singaporean Bank Landing (MoM) 

432.60B

 

 

 

426.40B 

 

 

 

                                   

Economic Events for May 1, 2012 for the Asian and US Markets

02:00     CNY                      Chinese Manufacturing PMI                                          53.60                      53.10       

China Manufacturing Purchasing Managers Index (PMI) provides an early indication each month of economic activities in the Chinese manufacturing sector. It is compiled by China Federation of Logistics & Purchasing (CFLP) and China Logistics Information Centre (CLIC), based on data collected by the National Bureau of Statistics (NBS).Li & Fung Research Centre is responsible for drafting and disseminating the English PMI report. Every month questionnaires are sent to over 700 manufacturing enterprises all over China. The data presented here is compiled from the enterprises responses about their purchasing activities and supply situations. The PMI should be compared to other economic data sources when used in decision-making.

02:30     AUD                      House Price Index                                                             -0.50%           -1.00%

The Australian House Price Index (HPI) measures the change in the selling price of homes in the nation’s eight state capitals. It is a leading indicator of health in the housing sector.

05:30     AUD                      Interest Rate Decision                                                       4.00%                    4.25%

Reserve Bank of Australia (RBA) board members come to a consensus on where to set the rate. Traders watch interest rate changes closely as short term interest rates are the primary factor in currency valuation.

15:00     USD                       ISM Manufacturing Index                                               53.5                        53.4

The Institute of Supply Management (ISM) Manufacturing Purchasing Managers Index (PMI) rates the relative level of business conditions including employment, production, new orders, prices, supplier deliveries, and inventories. The data is compiled from a survey of approximately 400 purchasing managers in the manufacturing industry. On the index, a level above 50.0 indicates industry expansion, below indicates contraction. 

23:45     NZD                      Employment Change                                                        0.4%                      0.1%

Employment Change measures the change in the number of people employed. Job creation is an important indicator of consumer spending.

23:45     NZD                      Unemployment Rate                                                         6.3%                      6.3%

The Unemployment Rate measures the percentage of the total work force that is unemployed and actively seeking employment during the previous quarter.

Government Bond Auctions (this week)

Date  Time  Country 

May 01  09:30  UK 

May 02  09:10  Sweden 

May 02  09:30  Portugal 

May 02  13:00  US 

May 03  08:30  Spain

May 03  08:50  France 

May 03  09:10  Sweden 

May 03  09:30  UK 

May 08  09:15  Austria 

May 08  09:30  Belgium 

May 08  14:30  UK 

May 08  15:30  Italy  

May 08  17:00  US 

May 09  09:10  Sweden 

May 09  09:30  Germany 

May 09  09:30  Swiss 

May 09  09:30  UK 

May 09  14:30  Sweden 

May 09  15:30  Italy  

May 09  17:00  US 

May 10  15:00  US 

May 10  17:00  US 

May 11  09:10  Italy   BOT auction

May 11  10:00  Belgium

 

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