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Key events on Wednesday - Westpac

FXStreet (Bali) - Sean Callow, FX Strategist at Westpac, reviews the day ahead, highlighting Japanese Tankan data, Australian retail sales and China PMI.

Key Quotes

Australian retail sales picked up in June and July after a very weak few months, with another reasonable reading expected in August (11:30am Syd/9:30am Sing/HK). Consensus is 0.4% m/m, Westpac on 0.3%. The overall trend is fairly flat though, with total turnover reliant on food-related spending as discretionary goods struggle. The recent fall in consumer sentiment also argues for a sub-consensus reading.

The Bank of Japan’s Q3 Tankan business survey is due at 9:50am Syd/7:50am Sing/HK. Consensus is for a slight weakening in the headline diffusion indexes, with some interest also in manufacturers’ projections of USD/JPY. It has been some time since the yen has responded notably to local data, even important releases such as this.

China’s annual national holidays commence today, running through 7 October inclusive. Despite this, the official manufacturing PMI for Sep is due (11am Syd/9am local). Consensus is for little change, at 51.0, easing further from what was a misleading YTD high of 51.7 in July. Also due are Sep CPI in Indonesia and Thailand and various PMIs unlikely to impact markets (S Korea’s probably most noteworthy given the dovish mood). Hong Kong markets are closed for two days, producing an increase in pro-democracy crowds on the streets.

The twice-monthly Global Dairy Trade auction takes place during NY trade. At the last auction the overall index was flat and whole milk powder up 0.6%. The final Sep Eurozone PMIs plus the UK manufacturing PMI are due.

The US data calendar is crowded, with most interest in the Sep manufacturing ISM and Sep ADP private payrolls. The ISM should remain very strong, ticking down slightly from 59.0 in Aug. Consensus on ADP payrolls is 205k, about steady versus Aug, which of course greatly overstated the official reading on private payrolls, which printed at 134k. Aug construction spending is seen up 0.5%.

Australia AiG Performance of Mfg Index fell from previous 47.3 to 46.5 in September

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