By FXEmpire.com

Analysis and Recommendation: (close of Asian session)

The USD/CNY is up at 6.2923 as the yuan fell after disappointing manufacturing data and the greenback has been gathering strength on the hopes of monetary accommodations from the Fed in view of the poor eco data numbers in the past weeks.

Chinese manufacturing expanded for a fifth straight month in April, prompting optimism about a moderate improvement in economic activity.

The state-affiliated China Federation of Logistics and Purchasing said on Tuesday its purchasing managers’ index, or PMI, rose 0.2 percentage points to 53.3 per cent in April, up from March’s 53.1 and February’s 51.0. A reading above 50 signifies expansion.

China’s economic growth declined to 8.9 per cent in the final quarter of last year after Beijing increased interest rates and tightened other controls to cool inflation.

Chinese leaders reversed course in December and promised more bank lending to help companies cope with a slump in global demand, but changes have been gradual.

Still, trading is likely to be subdued with much of Asia and Europe is closed on Tuesday for the May Day holiday.

Economic Data for April 30- May 1, 2012 actual v. forecast

EUR

CPI (YoY)

2.6%

2.5%

2.6%

USD

Core PCE Price Index (MoM)

0.2%

0.2%

0.1%

CAD

GDP (MoM)

-0.2%

0.2%

0.1%

USD

Personal Spending (MoM)

0.3%

0.4%

0.9%

USD

Chicago PMI

56.2

61.0

62.2

NZD

Labor Cost Index (QoQ)

0.5%

0.5%

0.7%

May 01

CNY

Chinese Manufacturing PMI

53.30

53.60

53.10

AUD

House Price Index (QoQ)

-1.10%

-0.50%

-0.70%

AUD

Interest Rate Decision

3.75%

4.00%

4.25%

Economic Events for May 1, 2012 for the Asian and US Markets

01:30 JPY Labor Cash Earnings

Indicator released by the Ministry of Health, Labor and Welfare shows the average income, before taxes, per regular employee. It includes overtime pay and bonuses but it doesn’t take into account earnings from holding financial assets or capital gains. Higher income puts upward pressures over consumption; therefore an increasing trend in earnings is inflationary for the Japanese economy.

02:30 CNY HSBC Manufacturing PMI

The HSBC Manufacturing Purchasing Managers Index (PMI) released by the Markit Economics is an early indicator of economic health in the Chinese manufacturing sector. Any reading above 50 signals expansion, while a reading under 50 shows contraction. As the Chinese economy has influence on the global economy, this economic indicator would have an impact on the Forex market.

12:15 USD ADP Employment Change

The Employment Change released by the Automatic Data Processing, Inc is a measure of the change in the number of employed people in the US Generally speaking; a rise in this indicator has positive implications for consumer spending which stimulates economic growth.

14:00 USD Factory Orders

The Factory orders released by the US Census Bureau is a measure of the total orders of durable and non durable goods such as shipments (sales), inventories and orders at the manufacturing level which can offer insight into inflation and growth in the manufacturing sector.

22:30 AUD AIG Performance of Services Index

AIG Performance of Services Index released by the Australian Industry Group presents business conditions in the Australian service sector. The group surveys 200 manufacturers on their assessment of the business situation including employment, production, orders, prices, and inventories, and their short-term planning. A result above 50 is seen as positive (or bullish) for the AUD, whereas a result below 50 is seen as negative (or bearish).

22:45 NZD Unemployment Rate

The Unemployment Rate released by the Statistics New Zealand is the number of unemployed workers divided by the total civilian labor force. If the rate is up, it indicates a lack of expansion within the New Zealand lobar market. As a result, a rise leads to weaken the Australian economy.

Government Bond Auctions (this week)

Date Time Country

May 02 09:10 Sweden

May 02 09:30 Portugal

May 02 13:00 US

May 03 08:30 Spain

May 03 08:50 France

May 03 09:10 Sweden

May 03 09:30 UK

May 08 09:15 Austria

May 08 09:30 Belgium

May 08 14:30 UK

May 08 15:30 Italy

May 08 17:00 US

May 09 09:10 Sweden

May 09 09:30 Germany

May 09 09:30 Swiss

May 09 09:30 UK

May 09 14:30 Sweden

May 09 15:30 Italy

May 09 17:00 US

May 10 15:00 US

May 10 17:00 US

May 11 09:10 Italy BOT auction

May 11 10:00 Belgium

Click here a current USD/CNY Chart.

Originally posted here