Asian Session Forex Recap – Feb. 5, 2016

  • Australia retail sales flat in December vs. 0.5% growth expected
  • Japan’s leading indicators down to 102.0% in December vs. 102.7% uptick expected, 103.5% last month
  • ANZ cuts Fonterra milk payout forecasts

Asian session forex traders had a re-run of yesterday’s price action, as they traded on risk aversion ahead of today’s major economic events.

Major Events:

Disappointing news from Australia – Australia’s retail sales report missed estimates for December, clocking in a 0.0% growth when analysts had expected a 0.5% uptick following November’s 0.3% increase.

A closer look validates the RBA’s vigilance in the housing market, as sales of household goods fell by 1.0%, followed by retailing (-0.9%) and cafes, restaurants, and takeaway food services (-0.5%). The bright spots include sales in food retailing (+0.8%), clothing, footwear and personal accessory (+1.1%), and department stores (+0.1%).

The Reserve Bank of Australia (RBA) wasn’t any help to the Aussie either, as its meeting minutes only echoed the decision-makers’ concerns over China and the global financial markets and their overall optimism in the economy.

Overall risk aversion theme – Australia wasn’t the only party-pooper for the bulls today. ANZ, New Zealand’s biggest rural lender, had downgraded Fonterra’s milk payout forecasts from $4.25/kg to $3.95/kg and weighed on the New Zealand dollar.

Oil prices also went into the mix, with Black Crack prices seeing some profit-taking after yesterday’s gains. Last but not the least, the recent yen strength took its toll on the Asian equities markets with Nikkei falling by 1.32%, followed by Australia’s ASX (-0.83%) and China’s A50 (-0.22%).

All eyes on the NFP – The rest of the major currencies were in tight ranges ahead of today’s events. Germany’s factory orders will be printed during the European session while U.S. session traders (as well as traders around the globe) will pay attention to the upcoming NFP report. Read Forex Gump’s trading guide if you’re planning on trading the release!

Major Currency Movers:

AUD – The Aussie took a beating across the board thanks to weak Australian retail sales and an RBA non-event. AUD/USD slipped by another 13 pips (-0.18%) and AUD/JPY inched 17 pips lower (-0.20%).

NZD – Kiwi bears also got their licks in after the milk payout data came out. NZD/USD fell by 39 pips (-0.58%), NZD/JPY dropped by 47 pips (-0.59%), and AUD/NZD rocketed by 43 pips (+0.40%).

Watch Out For:

  • 7:00 am GMT: German factory orders (expected at -0.3% vs. 1.5% previous)
  • 7:45 am GMT: French trade balance (-4.5B EUR expected vs. -4.6B EUR previous)
  • 7:45 am GMT: French government budget balance to print higher vs. 82.8B EUR deficit in December?

See more:

U.S. Session Forex Recap

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