Asian Session Forex Recap – Nov. 30, 2015

  • Japanese industrial production m/m: 1.4% vs. 1.9% expected, 1.1% previous
  • Japanese industrial production y/y: -1.4% vs. -0.9% expected, -0.8% previous
  • Japanese retail sales y/y: 1.8% vs. 0.9% expected, -0.1% previous
  • Japanese retail sales m/m: 1.0% vs. 0.3% expected, 0.8% previous
  • Japanese housing starts y/y: -2.5% vs. 2.6% expected, 2.6% previous
  • New Zealand’s ANZ business confidence index: 14.6 vs. 10.5 previous
  • Australian company operating profits q/q: 1.3% vs. 1.1% expected, -0.5% previous
  • Australian private sector credit: 0.7% vs. 0.6% expected, 0.7% previous

The Kiwi and the Aussie were the stars of today’s Asian forex session, thanks to optimistic reports that allowed them to shrug off the risk-off sentiment and score victories over their forex rivals.

Major Events:

ANZ business confidence index improves – Business confidence in New Zealand rose to a six-month high of 14.6 (10.5 previous) in November, according to ANZ’s Business Outlook report. Growth prospects are perceived by companies in New Zealand to be potentially good since activity outlook rose to 32.0 from 23.7 while investment intentions rose from 12.0 to 14.6. Also, profit expectations rose from 12.7 to 14.9 while employment intentions ticked higher from 12.1 to 13.5. Companies are probably relying more on domestic demand, though, since export intentions barely moved higher from 22.4 to 22.8.

In terms of specific sectors, most of the optimism came from the construction (23.5 vs. 5.7 previous) and services industries (26.7 vs. 18.3 previous). The retail (12.7 vs. 14.1 previous) and manufacturing (0.0 vs. 9.1 previous) sectors were not as optimistic, though. As for the agricultural sector, it was still down in the dumps at -12.5, but it saw some improvement when compared to the previous reading of -20.5.

Australian company operating profits riseCompany profits in Australia rose by 1.3% quarter-on-quarter for Q3, which is slightly better than the expected 1.1% increase and a significant improvement over the previous 0.5% decline. Surprisingly enough, the seasonally-adjusted profits of mining companies rose by 6.1%. The wages and salaries of most companies were also moderately up. Overall, they help to point a picture of a possible increase for Australia’s Q3 2015 GDP growth, or at the very least, an improvement in consumer and business sentiment.

Risk aversion during the Asian session – There was a noticeable lack of risk-taking during the Asian session, with the Nikkei 225 closing 0.695 lower to 19,747.47 -136.47 -0.69%. Market analysts were pointing to caution ahead of an event-laden week and another round of declines in Chinese equities, with the Shanghai Composite down by 1.28% to 3,392.34, as the reasons for the risk-off sentiment. Commodities, especially metals, were also probably weighing-in on risk sentiment since they were mostly in the red, with gold down by 1.39% to $1,054.80 per troy ounce.01

Major Currency Movers:

NZD – The Kiwi stumbled a bit at the start of the forex session, probably because of the prevailing risk-off sentiment. The Kiwi regained its footing, however, probably because of the improvement in ANZ’s business confidence index.

NZD/USD was up by 24 pips (+0.38%) to 0.6547, NZD/JPY was up by 25 pips (+0.32%) to 80.38, NZD/CHF was up by 39 pips (+0.44%) to 0.6749

AUD – Like the Kiwi, the Aussie showed some weakness at the start of the forex session, but quickly recuperated and made a comeback shortly after Australian company reported a better-than-expected rise in operating profits. The Aussie failed to win out against the Kiwi, however. Maybe forex traders are not as gung-ho on the Aussie because of all the events lined up for the Aussie this forex trading week?

AUD/USD was up by 11 pips (+0.16%) to 0.7194, AUD/CAD was up by 23 pips (+0.23%) to 0.9625, AUD/CHF was up by 15 pips (+0.21%) to 0.7415

JPY – The yen was showing some strength during the forex session, except against the Kiwi and the Aussie, of course. This could have been due to forex traders pricing-in the better-than-expected readings for Japanese retail sales that came out before the open. But given that the yen’s forex price action was at a grinding pace, I’m more inclined to believe that the risk-off sentiment was driving demand for the safe-haven yen.

USD/JPY was down by 9 pips (-0.08%) to 122.74, CAD/JPY was down by 14 pips (-0.16%) to 91.73, GBP/JPY was down by 22 pips (-0.12%) to 184.47

Watch Out For:

  • German retail sales at 7:00 am GMT (-0.2% expected, 0.0% previous)
  • Swiss KOF leading indicator at 8:00 am GMT (100.2 expected vs. 99.8 previous)
  • BOE net consumer credit at 9:30 am GMT (£1.3B expected, £1.3B previous)
  • BOE mortgage approvals at 9:30 am GMT (69.9k expected, 68.9K previous)
  • Month-on-month preliminary estimate for Italian CPI at 10:00 am GMT (-0.2% expected, 0.2% previous)
  • Month-on-month preliminary estimate for German CPI at 1:00 pm GMT (0.1% expected, 0.0% previous)
  • Year-on-year preliminary estimate for German CPI at 1:00 pm GMT (0.4% expected, 0.3% previous)
  • Month-on-month preliminary estimate for German HICP at 1:00 pm GMT (0.1% expected, 0.0% previous)
  • Year-on-year preliminary estimate for German HICP at 1:00 pm GMT (0.3% expected, 0.2% previous)

See more:

U.S. Session Forex Recap

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