Australian dollar jumps sharply in Asian session on better than expected GDP report. The economy grew 1.1% qoq in Q1, much stronger than consensus of 0.8% qoq. Also prior quarter's figure was revised higher from 0.6% qoq to 0.7% qoq. Annually, GDP growth has indeed accelerated to 3.1% yoy versus expectation of 2.8% yoy and prior quarter's 3.0% yoy. Traders are paring back bet for more rate cut by RBA later this year. But the odds will very much depends on the new inflation projections to be released in July. And the chance of an August rate cut, which is speculated by some, is uncertain. Nonetheless, for now, AUD/USD's break of 0.7259 minor resistance indicates short term bottoming and some rebound should be seen, at least ahead of Friday's US non-farm payroll. Also released down under, New Zealand terms of trade index rose 4.4% qoq in Q1 versus expectation of 0.9% qoq.
In China, the official PMI manufacturing was unchanged at 50.1 in May versus expectation of 50.0. Official non-manufacturing PMI dropped to 53.1. The statistics bureau noted that "demand remains on the weak side, and the base for growth in the manufacturing sector isn't solid yet." The Caixin PMI manufacturing dropped to 49.2 versus expectation of 49.3, prior month's 49.4. That's the seventh straight month of sub-50 reading which indicates contraction. Japan capital spending rose 4.2% in Q1. Asian stock markets are mixed and shrugs off the releases.
Looking ahead, PMI data will be the main focuses today. Swiss will release SVME PMI, GDP and retail sales. Eurozone will release PMI manufacturing revision. UK will release PMI manufacturing mortgage approvals and M4 money supply. US will release ISM manufacturing and construction spending. Fed will also release the Beige Book economic report.