Asian Session Forex Recap – Dec. 9, 2015

  • AU Westpac consumer sentiment: -0.8% vs. 3.9% previous
  • AU home loans: -0.5% vs. -1.0% expected, 2.0% previous
  • AU investment lending: -6.1% vs. -8.1% previous
  • Japan core machinery orders: 10.7% vs. -1.5% expected, 7.5% previous
  • China CPI: 1.5% vs. 1.4% expected, 1.3% previous
  • China PPI (y/y): -5.9% vs. -6.0% expected, -5.9% previous

Risk aversion continued to grip the markets during the Asian session as forex traders digested China’s weak trade data.

Major Events:

Mixed data from Australia – Risk aversion dialled down during the Asian session, mostly due to upside surprises in economic reports printed by Australia, China, and Japan. Australia’s Westpac consumer sentiment showed a dramatic drop from 3.9% to -0.8% but was buoyed by improvements in home loans and investment lending numbers.

Yen gets a boost –Demand for the yen got a boost after Japan’s core machinery orders jumped by 10.7% in October when market players had expected a 1.5% decrease. The numbers came at the back of Japan’s final GDP reading cancelling out a technical recession in the Land of the Rising Sun.

China’s CPI and PPI readings – China’s consumer prices ticked 1.5% higher in November, slightly better than expectations of a 1.4% uptick and last month’s 1.3% increase. A closer look tells us that the improvements came mostly from higher demand in transportation, health care, and personal activities.

Tight trading conditions
– Volatility was tight during the session despite the major economies printing economic reports. One possible explanation is that forex traders are holding tight until this week’s central bank statements are printed. The RBNZ is due at 9:00 pm GMT today, followed by the SNB and the BOE’s policy decisions tomorrow. Read Forex Gump’s trading guide if you haven’t yet!

Major Currency Movers:

JPY – Japan’s better-than-expected core machineries report as well as a bit of lingering risk aversion in the markets kept the low-yielding yen in demand.

USD/JPY is down by 35 pips (-0.28%), EUR/JPY is kept below 134.00, and GBP/JPY is down by 34 pips (-0.18%).

AUD – Thanks to China’s slightly upbeat CPI report, the Aussie bulls were able to hold their fort during the Asian session. AUD/USD is up 15 pips (+0.21%) and AUD/NZD is up 21 pips (+0.19%).

USD – The low-yielding Greenback lost a couple more pips, possibly due to a slight improvement in overall risk sentiment. EUR/USD is up 22 pips (+0.20%), GBP/USD is up 14 pips (+0.09%), and USD/CHF is right back to its intraday low near .9920 after hitting a session high of .9945.

Watch Out For:

  • 6:00 am GMT: Japan preliminary machine tool orders (-22.9% previous)
  • 6:45 am GMT: Switzerland unemployment rate (expected to remain at 3.4%)
  • 7:00 am GMT: German trade balance (21.7B EUR expected vs. 22.9B EUR previous)
  • 10:30 am GMT: U.K.’s Financial Policy Committee (FPC) will publish its meeting minutes on risks to financial stability. Not a usual market-mover, but keep an eye out for possible sound bites the BOE could use in its meeting this week!

See more:

U.S. Session Forex Recap

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