Strong Chinese PMI will provide a further boost to AUD
China’s September HSBC PMI accelerated to 51.2 – a 6-month high – from 50.1 in August and builds on the improvement in overall Chinese data reported during July and August. The stronger reading bolsters the view of our Chinese economists that the government is on target to meet its growth target of 7.5% this year. Unsurprisingly, Asian stocks have rallied in response while AUD and NZD are the principal beneficiaries in the G10 world. We are very constructive on AUD and NZD through to yearend 2013. Our favoured trade is long AUDJPY (entry and stop 91.90, target 96.00).
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BNP Paribas