Asian Session Recap – February 12, 2014

  • Australia Westpac consumer confidence falls to nine-month low
  • Japan core machinery orders -15.7% vs. -4.1% expected
  • China shows strong January trade balance numbers
  • Nikkei closes up 0.56% at 14,800.06

China sure likes starting the year with a bang! Its January trade balance numbers reveal a 10.6% annualized gain in exports (vs. 0.1% expected) and a 10% gain in imports (vs. 4.0% expected). This led to a whopping $31.86 billion in trade surplus, a monster leap from the expected $23.7 billion and December’s $25.6 billion surplus figures.

The strong trade numbers inevitably attracted suspicion. While the six-month high jump in imports can be explained by China buying record volumes of iron ore, crude oil, and copper, there’s no real explanation for the strong increase in exports.

Whether China’s data was fabricated or real, the currency bulls still reacted to the news. China’s numbers, combined with Yellen’s taper-friendly speech, both lifted risk appetite. AUD/USD was pushed to its one-month highs and is currently trading above .9050 while EUR/USD, GBP/USD, and NZD/USD also showed dollar weakness.

The day’s not over yet! At 10:00 am GMT we’ll see the euro zone’s industrial production numbers. Then, at 10:30 am GMT Mark Carney will take the stage with the BOE inflation report. Market geeks expect the central bank to make adjustments to its forward guidance policy and try to postpone another rate hike. If this happens, then we might see the pound trade lower across the board.

Watch these events closely, folks!

See also:

U.S. Session Recap

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