Initially, it looks as if the Asian session will have several different announcements on Tuesday that could make trading interesting. In our opinion though, we believe that the reaction of the HSBC PMI numbers coming out of China will be muted because of the impending RBA announcement out Australia. We don’t expect any change in the interest rate, but the statement will of course be parsed by traders for any hand as to where the RBA is going next. With that, we believe that the Australian dollar itself will probably be what reacts the most. Any chance of a rate increase in the near term should send that currency higher.
The UK Composite PMI numbers could possibly move the FTSE and the British pound itself, but we believe you should think of a more or less as an excuse to go higher as both of those assets have been sold off far too much recently. If the Composite PMI numbers come out above 58, that should only turbo boost the bounce that we are starting to see in the FTSE, as well as the GBP/USD pair.
Looking forward, we have the US ISM Nonmanufacturing Composite numbers. That number is anticipated to be 56.5, and if we get a number above there we believe that the S&P will continue to rise and bounce towards the 1960 handle. Frankly, we think the S&P 500 is looking to do so anyway, and this would simply be the excuse that it needs.
New Zealand offers its employment numbers later in the day, which should be a regional announcement at best. Look for the NZD/USD pair to react to it, but probably not much else. That being the case, we think that by the time the Americans have their announcement, the trading day will be rather quiet.