Asian Session Recap – March 12, 2014

  • AU Westpac consumer confidence at -0.7% vs. -3.0% previous
  • AU home loans at 0.0% vs. 0.5% expected and -3.3% previous
  • Australia executes largest bond sale on record
  • Nikkei-JPY connection overwhelmed by USD/JPY bargain hunting
  • Nikkei closes down2.59% at 14,830.39
  • Euro Zone industrial production on tap

What risk aversion? The major currencies continued to trade without direction despite a busy morning for equities and commodities traders. Pairs like EUR/USD, GBP/USD, and USD/CAD remained in very tight ranges while NZD/USD slowly inched higher on RBNZ rate hike speculations.

AUD/USD was also surprisingly resilient today. Australia’s Westpac consumer confidence came in at 99.56, its first time below 100 since May 2013, while home loans in the Land Down Under came in flat when analysts had been expecting a 0.5% uptick.

Australia had also just sold 7 billion AUD worth of 12-year notes (the largest bond sale on record) to finance its budget deficit and extend the length of its yield curve. Despite that, AUD/USD didn’t drop by more than 40 pips and instead stayed around the .8950 area.

The Aussie isn’t the only puzzle in today’s Asian session trading. The yen crosses defied the usual Nikkei-JPY inverse correlation when they strengthened while the Nikkei was dropping and weakened when Japan’s equities markets has stabilized. Analysts believe that the move was due to traders buying the yen crosses at dips.

Let’s see if traders get enough motivation to break intraday ranges over the next couple of hours. At 10:00 am GMT we’ll see the euro zone’s industrial production report, which is expected to print a 0.5% increase against last month’s 0.7% decline. No other major data is scheduled for release, but watch your news wires closely in case some European official gives a sentiment-changing speech!

See also:

U.S. Session Recap

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