Aussie rises mildly in Asian session as lifted by China data. The official China manufacturing PMI returned to expansion region and rose to 50.4 in August, above expectation of 50.0. That's also the highest reading since October 2014. Looking at the details, factory output rose further to 52.6, up from 52.1, while total new orders rose to 51.3, up from 50.4. Meanwhile, new export orders also improved to 49.7, up from 49.0. The official non-manufacturing PMI dropped slightly to 53.5, down from 53.9. However, it should be noted that the Caixin manufacturing PMI dropped to 50.0, down from 50.6 and missed expectation of 50.3. Also, the recovery of Aussie is limited by weakness of its own data. Australia retail sales rose 0.0% mom in July, below expectation of 0.3%. Also released in Asian session, New Zealand terms of trade dropped -2.1% qoq in Q2. Japan capital spending rose 3.1% in Q2.
A development to note in the financial markets is the extended fall in oil prices. WTI crude oil's recent fall from 48.75 continues this week and reaches as low as 44.51. Rebound in Dollar is seen as one of the factors. Also, US oil inventories rose more than expected in the week of August 26. However, the major factor is likely markets' skepticism over OPEC's meeting in September on output freeze. Weakness in oil price is also seen weighing down stocks as DJIA closed down -53.42 pts, or -0.29% to 18400.88 yesterday. Meanwhile, Asian equities are mixed with Nikkei trading up 21.1 pts, or 0.13% at the time of writing. But China and Australia indices are trading down.
Looking ahead, manufacturing data is the major focus today. UK will release PMI manufacturing in European session while Swiss will release SVME PMIs and retail sales. Eurozone will release PMI manufacturing final. US will also release ISM manufacturing and is expected to drop slightly to 52.3 in August. ISM manufacturing employment were below 50 level for six of seven months this week and this figure will be watched for clues on tomorrow's NFP. US will also release Challenger job cuts, non-farm productivity, jobless claims and construction spending.