Asian Session Forex Recap – Sept. 30, 2015

  • Japanese retail sales up 0.8% y/y in Aug vs. projected 1.2% increase
  • Japan’s preliminary industrial production in Aug down 0.5% vs. 1.1% consensus
  • Japanese PM Abe: More needs to be done to fight deflation
  • New Zealand ANZ business confidence index up from -29.1 to -18.9
  • Australia’s building approvals slumped by 6.9% in Aug vs. -1.8% forecast
  • Australian private sector credit picked up by 0.6% in Aug
  • Euro zone CPI estimates, German and French consumer spending data due

After taking it easy in the past couple of days, Asia and Oceania got back to the forex grind by releasing a bunch of economic reports today. It’s the last day of the month and quarter anyway!

Things aren’t looking so good in Japan, as the country’s retail sales report indicated a 0.8% year-over-year gain in August versus the projected 1.2% increase. Its preliminary industrial production report for the same month also turned out to be a disappointment since it posted a surprise 0.5% decline instead of the estimated 1.1% rise. Components of the report revealed that factories may have reduced their output to cope with declines in prices, underscoring Japanese Prime Minister Abe’s remarks saying that more needs to be done in order to fight deflation.

USD/JPY is up 20 pips and closing in on the 120.00 mark (+0.17%), EUR/JPY is up 37 pips to 135.00 (+0.27%), GBP/JPY is up 51 pips to 181.88 (+0.28%), AUD/JPY is up 42 pips to 84.00 (+0.51%), and NZD/JPY is up 37 pips to 76.35 (+0.50%).

Over in Australia, the economic situation is also looking a bit glum after the country reported a jaw-dropping 6.9% tumble in building approvals. This was much worse than the projected 1.8% decline, although the previous reading was upgraded to show a 7.9% jump from the initially reported 4.2% increase. Besides, private sector credit enjoyed another stronger than expected 0.6% gain in August, suggesting that businesses and consumers are confident about their financial situation.

Businessmen in New Zealand also saw a slight improvement in sentiment, as the ANZ business confidence index climbed from -29.1 to -18.9 this month. This caps off the index’s five-month slide, suggesting that a recovery might be underway. China, on the other hand, is still scrambling to revive economic activity, as the government recently unveiled plans to reduce the purchase tax for some vehicles.

AUD/USD is up 25 pips and testing the .7000 resistance (+0.35%) and NZD/USD is up 22 pips at .6367 (+0.32%). The comdolls are also advancing against their European counterparts, with EUR/NZD down 44 pips (-0.25%), EUR/AUD down 30 pips (-0.19%), GBP/NZD down 50 pips (-0.25%), and GBP/AUD down 42 pips (-0.18%).

Europe has a bunch of data releases coming up, starting with Switzerland’s UBS consumption indicator and Germany’s retail sales report due 7:00 am GMT. This will be followed by the release of French consumer spending data at 7:45 am GMT and the Swiss KOF economic barometer at 8:00 am GMT. Employment reports from Germany and Italy are also lined up, with the former likely to spur a larger reaction from euro forex pairs.

The pound isn’t one to get uninvited to this month-end forex party, as the U.K. is gearing up to release its current account balance and final Q2 GDP reading at 9:30 am GMT. After that, the euro zone will print its CPI estimates for September at 10:00 am GMT, with weak readings likely to revive speculations of further ECB easing.

Whew! Quite a lot, eh? Be on the lookout for potential profit-taking activity as well!

U.S. Session Recap

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