Asian Session Forex Recap – Nov. 12, 2015

  • AU unemployment rate drops from 6.2% to 5.9%
  • AU employment change: 58.6K vs. 14.8K expected, -0.8K previous
  • AU MI inflation expectations remains at 3.5%
  • UK RICS house price balance: 49% vs. 45% expected, 44% previous
  • Japan PPI: -3.8% vs. -3.5% expected, -4.0% previous
  • Japan core machinery orders: 7.5% vs. 3.1% expected, -5.7% previous
  • PBoC sets yuan lower for 8th day in a row, longest streak since 2008

Risk-taking was the name of the game during the Asian session, as forex traders priced in better-than-expected reports from Australia and Japan.

Major Events:

Australia’s jobs numbers – The Land Down Under’s employment reports caused more than a few heads to roll in the markets. Details show that unemployment fell from 6.2% in September to 5.9% in October. Not only that, but the number of employed workers jumped by a net of 58,600 after falling by 800 last month. Analysts had been expecting the jobless rate to remain at 6.2% and a net of 14,800 workers to gain employment.

A closer look at the report also tells us that the increase in employment mostly came from full-time positions from states that had less exposure to the slowdown in the mining sector. Heck, even participation rate actually rose from 64.9% to 65.0% when market players hadn’t expected changes!

Japan’s core machinery orders – A leading indicator for Japan’s capital expenditures rose by 7.5% in September, its first increase in four months. The news is welcome to yen bulls, who are having a tough time buying the low-yielding currency amidst the BOJ’s pronouncements that it would continue its QQE program until inflation reaches its 2.0% target.

ECB rhetoric – Seem like traders haven’t gotten over the remarks made by ECB Executive Board member Benoit Coeure, who said that the central bank has yet to decide on further easing and isn’t committed to doing so next month. Talk about feeling the pressure!

Major Currency Movers:

AUD – Though more than a few traders doubted the positivity of Australia’s jobs release, the numbers were still enough to boost the Aussie across the board. AUD/USD is up by 81 pips (+1.15%), AUD/JPY is 100 pips higher (+1.15%), EUR/AUD is 148 pips lower (-0.97%), and AUD/NZD is up by 141 pips (+1.31%).

USD – The Greenback suffered during the session, as positive news from Australia and Japan as well as decreased possibility of stimulus from the ECB in December encouraged risk-taking in the markets. EUR/USD popped up by 50 pips before settling at 1.0761 while GBP/USD rose by almost 30 pips to 1.5247 before settling at 1.5225. USD/CHF also lost 13 pips throughout the session.

JPY – Last but not the least on the roster is the yen, which reacted positively to Japan’s better-than-expected core machinery orders report. USD/JPY fell from its 123.03 session high to trade at 122.89 while EUR/JPY fell from 132.55 to trade at 132.24. Ditto for GBP/JPY, which fell from 187.51 to 187.10.

Watch Out For:

  • German final CPI out at 7:00 am GMT
  • French CPI out at 745 am GMT
  • Draghi to speak in Brussels at 8:30 am GMT. We don’t expect any news from the ECB’s head honcho, though forex traders would no doubt be watching for any confirmation that a QE in December isn’t a done deal.

See more:

U.S. Session Recap

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