Aussie higher after China manufacturing data; Kiwi dips; Asia stocks lower
The Aussie gained in Asia on Monday as the Chinese Caixin survey on manufacturing showed better than expected .
In Australia, the AI Group manufacturing survey fell 1.9 points to 50.2. The TD Securities-Melbourne Institute inflation gauge for October was unchanged from the previous month as tradable inflation fell for the first time in four months and the pace of non-tradable inflation remained stable.
A separate report said building approvals in Australia climbed 2.2%, better than the 2.0% gain seen, and matching the Reserve Bank's forecast for continued growth in building construction. The central bank's latest view on housing construction will be seen in the quarterly Statement on Monetary Policy due to be released on Friday.
AUD/USD traded at 0.7140, up 0.06% from negative territory before the Caixin survey, while USD/JPY dipped 0.14% to trade at 120.45.
NZD/USD declined 0.24% to settle at 0.6764.
China's Caixin manufacturing gauge for October rose to 48.3 with against 47.5 expected and up from last month's 47.2.
The Chinese economy is hardly responding to this year's monetary easing, according to the latest PMI data.
The official manufacturing PMI for October, released on Sunday by the National Bureau of Statistics and the China Federation of Logistics and Purchasing, came in with a reading of 49.8, the same as September, below the 50 level which indicates contraction and expansion.
The official non-manufacturing PMI, also posted Sunday, slid to 53.1 from 53.4 in September, the weakest reading since December 2008.
The PMIs offer the latest evidence that the economy is depressed. China's biggest industrial firms are coming out with lousy nine-month results.
Over the weekend, premier Li Keqiang reassured markets that the economy can maintain "medium to high-level growth" for some time, and that China's consumption has "a lot of room to grow."
Even after the PBOC's interest-rate cut last month, the sixth in almost 12 months, real interest rates for borrowers are still soaring.
The reserve ratio for lenders is also at a high level - 17.5% for the major banks - so the PBOC has much scope to trim them once again. But the regulator may prefer to use more targeted tools, through its medium-term lending facility and standing lending facility.
Asian stocks slipped into the red territory on Monday after the data with Japan’s Nikkei Stock Average down 2.10% and Australia’s S&P/ASX 200 lower 1.27%.
Hong Kong’s Hang Seng Index fell 1.04% while the Shanghai Composite Index was down 1.67%.
