Asian Session Forex Recap – May 6, 2015

  • Employment up by 0.6% in New Zealand for Q1 2015 vs. 0.7% consensus
  • New Zealand jobless rate steady at 5.8%, participation rate improved
  • Wages up by 0.3% in New Zealand for Q1 vs. estimated 0.4% increase
  • Australia’s retail sales up by 0.3% in April, lower than estimated 0.4% gain
  • Chinese HSBC services PMI up from 52.3 to 52.9 in April
  • Japanese banks still closed for the holiday

I’m seeing red! Thanks to New Zealand’s bleak headline jobs figures, forex traders started pricing in higher odds of an RBNZ interest rate cut in their next policy statement. Hiring picked up by 0.6% in Q1 2015, lower than the projected 0.7% increase and the previous period’s 1.2% gain. Meanwhile, the jobless rate was unchanged at 5.8% instead of improving to 5.5%. Wage growth was also weaker than expected, as the labor cost index marked a mere 0.3% uptick versus the estimated 0.4% rise.

The Kiwi is lower across the board, with NZD/USD nursing a 78-pip loss (-1.03%) and NZD/JPY lower by 92 pips (-1.01%). The New Zealand dollar also chalked up losses against its European forex counterparts, as EUR/NZD popped up by 240 pips (+1.62%) and GBP/NZD climbed by 271 pips (+1.34%).

On the flip side, the Australian dollar managed to brush off the weaker than expected retail sales reading for April. Consumer spending rose by only 0.3% during the month, slower than the estimated 0.4% gain and the previous month’s 0.7% increase. AUD/USD is up 20 pips (+0.17%) and AUD/JPY is up 21 pips (+0.20%), as news that iron ore futures hit a 6-week high lifted the Australian currency. It also helped that HSBC printed an improvement for its Chinese services PMI from 52.3 to 52.9, reflecting a stronger pace of industry expansion for April.

The euro has also been off to a running start today, with the shared currency logging in strong gains across the forex charts. Positive expectations for the Greek debt negotiations continued to support euro pairs after European Commissioner for Economic Affairs Pierre Moscovici remarked that the talks between the Greek government and its creditors have been amicable, increasing the odds that a reasonable deal will be struck soon.

Forex traders could turn their attention back to economic data in the next few hours though, as the top economies in the euro zone are set to print their final services PMI readings. Apart from that, the region’s retail sales report is also due and analysts are expecting to see a 0.4% slide. Also lined up for today is the U.K. services PMI, which might indicate a dip from 58.9 to 58.6 and possibly force the pound to resume its drop. Better watch out for these potential market-movers!

 

U.S. Session Recap

Bonnie and Clyde, peanut butter and jelly, Justin Bieber and his hair. Some things just go well together.

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