Asian Session Forex Recap – June 26, 2015

  • NZ May trade balance showed 350M NZD surplus vs. 90M NZD projected deficit
  • NZ exports down by 4.7%, imports dropped by 7.0%
  • Japan’s May national core CPI up by 0.1% vs. 0.0% consensus
  • Tokyo core CPI increased by 0.1% in May as expected
  • Japanese household spending up by 4.8% y/y vs. 3.5% forecast

Asian session forex traders must’ve had a quick breakfast since they were off to an early start with economic releases from New Zealand and Japan. The former released its trade balance in the wee hours of the morning, printing a better-than-expected 350 million NZD surplus instead of the projected 90 million NZD deficit.

Market watchers didn’t show any love for the Kiwi, though, as the underlying components of the trade report reflected jaw-dropping weaknesses. For one, exports slid by 4.7% during the month, mostly due to falling dairy prices and a 22% slide in whole milk powder shipments to China. Imports chalked up an even larger 7.0% tumble, indicating a drastic slowdown in domestic demand. I don’t know about you but I can practically hear Kiwi bears and Forex Gump’s thoughts chanting “Rate cut! Rate cut! Rate cut!” from way over here.

NZD/USD turned upon hitting resistance around the .6900 handle and is trading 11 pips lower (-0.16%) so far. NZD/JPY retreated after reaching a high of 85.66 and is down 30 pips (-0.35%).

On a more positive note, Japan’s data dump indicated a few green shoots for the Asian economy, suggesting that BOJ policymaker Kiuchi might soon get more fellas to join him at his taper camp. The national core CPI for May logged in a better than expected 0.1% uptick versus the estimated flat reading while Tokyo’s core CPI came in at 0.1% as expected. Household spending jumped by 4.8% year-over-year in May, stronger than the projected 3.5% increase, and a strong improvement from the previous month’s 1.3% annualized decline.

Yen bulls charged across the forex charts, fueled by these upbeat figures from Japan. USD/JPY is down 23 pips (-0.19%), EUR/JPY is down 42 pips (-0.31%), GBP/JPY is down 30 pips (-0.16%), and AUD/JPY is down 41 pips (-0.44%).

There ain’t much in terms of top-tier reports in the next few hours, with only the German import prices data and euro zone private loans figures up for release. Forex market participants are likely to keep their eyes and ears peeled for any updates on the Greek debt talks as usual, after several EU officials stressed the need to come up with a deal pronto.

Last time I checked, Greek PM Tsipras was getting so frustrated that he threatened to leave his own Syriza party and German Chancellor Merkel hinted that it could all come down to the wire during the Eurogroup meetings over the weekend. Better be on the lookout for any potential profit-taking scenarios in the next few hours then!

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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