A mixed picture for the AUD overnight
We had mixed signals for the AUD in the overnight session, which saw data released in both Australia and China. Domestically, the numbers were on the softer side as we started off with the AIG manufacturing PMIs for November. This came in at 48.1 vs 51.6 previously, so the dive below 50.0 should be a warning sign over weakness ahead. We then saw the release of October building approvals, showing a chunky 8.1% drop on the month, and given the large contribution of construction work to the economy, this is likely to have some bearing on growth stats in coming months.
The news did not get any better as Q3 Company gross profits fell 0.8% in the quarter. This came out against consensus forecasts of a 2.0% rise, along with the above data, it was a poor showing from the Australian economy at the start of the week.
Against this, however, China's Caixin manufacturing PMIs come out better than expected at 51.8 vs 51.7, and with this showing a pick up in factory activity, the hope will be that this translates into fresh increased demand for Australian raw materials and exports.