AUD/USD Daily Forecast

Friday, Jan 29 2016

Friday was marked by Australian PPI data. Australian PPI rose 0.3% in the December quarter 2015. Analysts were anticipating 0.6% increase. Rise was mainly due to rises in the prices received for building construction (+0.5%), other transport equipment manufacturing (+3.0%) and sheep, beef cattle grain farming and dairy farming (+5.4%). It was partly offset by falls in the prices received for petroleum refining and petroleum fuel manufacturing (–12.1%). PPI rose 1.9% through the year to the December quarter 2015.

In the US session, GDP, Chicago PMI and Revised Consumer Sentiment figures were published. Real gross domestic product increased at an annual rate of 0.7% in the fourth quarter of 2015, missing forecasts on 0.8% increase. In the third quarter, real GDP increased 2.0%. The increase in real GDP in the fourth quarter primarily reflected positive contributions from personal consumption expenditures (PCE), residential fixed investment, and federal government spending that were partly offset by negative contributions from private inventory investment, exports, and nonresidential fixed investment. Imports, which are a subtraction in the calculation of GDP, increased.

The University of Michigan final index of sentiment dropped to 92 from 92.6 in December, backtracking from a preliminary January reading of 93.3. The median projection in a Bloomberg survey called for 93. “Most of the downward revisions that occurred in late January were due to stock market declines, reflected in the erosion of household wealth as well as weakened prospects for the national economy,” Richard Curtin, director of the University of Michigan consumer survey, said in a statement.

The Chicago Business Barometer bounced back sharply in January, increasing 12.7 points to 55.6 from 42.9 in December, the highest pace of growth in a year. Analysts were expecting smaller incline to 45.6. The latest increase followed extreme weakness in the fourth quarter, with the Barometer averaging 47.7, the weakest quarterly growth since Q3 2009. The three month trend remained depressed at 48.7, up only slightly from 47.7 in December.

There will be no data releases from Australia on Monday, but from China bot official and Caixin Manufacturing PMI figures will be published. More important, Caixin's survey, is expected to show no change. In the US session, also, Manufacturing PMI figures are scheduled for a release. Slight increase to 48.6 is forecasted.

Figures to watch:

Caixin Manufacturing PMI (Monday 2:45)

ISM Manufacturing PMI (Monday 16:00)

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