Asian Session Forex Recap – Apr. 10, 2015

  • Chinese CPI y/y: 1.4% vs. 1.3% forecast, 1.4% previous
  • Chinese PPI y/y: -4.6% vs. -4.8% forecast, -4.8% previous
  • Australian Housing Finance m/m: 1.2% vs. 3.0% forecast, -3.5% previous
  • Australian Lending Finance m/m: -3.4% vs. -0.1% previous

China’s much anticipated inflation data came without the fireworks this month as the consumer component came pretty much inline with forecasts/previous reads, while the producer prices fell only slightly.  While the data was better than forecasts, we still see pressure on Chinese company profits, which continues to put pressure on the government to take action (i.e., interest rate changes) to combat slowing economic conditions.

The usual retail forex market proxy for trading Chinese data, the Australian dollar, actually dipped lower after the release of the better-than-expected data, likely on a “buy-the-rumor, sell-the-news” scenario as it rallied going into the event. AUD/USD rallied as high as .7720 before falling on the release, now trading around .7695. The New Zealand dollar saw similar market behavior on the session with NZD/USD rallying as .7576 before falling to its current levels around .7567 after the Chinese data.

The euro is also seeing a directional bias, rallying since the Thursday afternoon U.S. session.  There doesn’t seem to be a direct catalyst, so it’s likely we’re seeing positive sentiment after Greece made it’s IMF payment, earning more emergency funds to keep the country afloat.  And oh by the way, avoiding a systemic European banking crisis for now.

EUR/USD is up 10 pips (+0.09%) to 1.0667, EUR/JPY is up 4 pips (+0.04%) to 128.53, and EUR/CAD is up 34 pips (+0.25%) to 1.3437

The forex calendar for the London session is a heavy one starting with the read on Swiss unemployment (3.2% forecast/previous) at 6:45 am GMT. Then at 7:45 am GMT, we’ll get French industrial and manufacturing production data.  The French industrial data is the likely market mover of this group, so be aware of the m/m forecast of -0.1% vs. 0.4% previous.

The highlight of the morning London session is likely to come from the U.K.’s manufacturing and industrial production data at 9:30 am GMT, which looks to rebound from last month’s negative reads. The monthly manufacturing production is set to come in at 0.4% vs. -0.5% previous, while the monthly industrial production number is set to tick higher to 0.3% vs. -0.1% previous.  We’ll also get the U.K. construction output data, forecasted to come in at 2.2% vs. -2.6% previous, to add a little spice to the mix and hopefully get Sterling moving to create more forex trade opportunities.G00d luck!

U.S. Session Recap

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