Asian Session Forex Recap – Mar. 2, 2016

  • Australia HIA new home sales up by 3.1% vs. 6.0% growth last month
  • U.K. BRC shop price index (y/y) down by 2.p0% vs. 1.8% decline in December
  • Australia’s GDP prints a 0.6% growth in Q4 2015 vs. 0.4% uptick expected, 1.1% figure in Q3 2015

Risk appetite was the name of the game during the Asian session, as forex traders priced in strong reports and extended yesterday’s risk rallies.

Major Events:

Australia prints strong GDP – If you’ve read Forex Gump’s economic calendar cheat sheet, then you’ll know that the GDP is one of the most closely-watched economic reports in the industry.

A few hours ago the Land Down Under’s GDP figures blasted above its estimates, printing a 0.6% growth for Q4 2015 (vs. 0.4 uptick expectations) and an annualized growth of 3.0% (vs. 2.5% growth expectations). Even Q3 2015’s GDP figures got revised higher from 0.9% to 1.1%, pushing the 2015 GDP to 2.5%. Yowza!

A closer look reveals that consumer (+0.4%) and public (+0.2%) spending, as well as housing construction offset the drag from weaker company investment and profits and export prices. Overall the numbers excited the Aussie bulls who were still on a high from the RBA’s recent less-dovish-than-expected policy decision.

If you recall, the RBA felt optimistic over its domestic economy, and said that it would monitor the impact of external factors on economic growth. Looks like the odds against a rate cut in the foreseeable future are stacking up!

Overall risk appetite – Thanks to another leg higher for oil prices and an extension of yesterday’s risk rallies, higher-yielding currencies snatched a couple of pips from their lower-yielding counterparts. Australia’s strong data and the yen’s weakness didn’t hurt equities traders either. By lunch break Nikkei was up by a healthy 4.31% followed by Hang Seng (+2.59%), Shanghai (+2.25%), and Australia’s ASX (+2.22%).

Major Currency Movers:

AUD – The Aussie threw a one-two punch at its counterparts as strong Australian data and overall risk appetite boosted the high-yielding currency.

AUD/USD popped up by 55 pips (+0.77%), AUD/JPY shot up by 48 pips (+0.59), EUR/AUD dropped by 123 pips (-0.81%), and AUD/NZD rose by 86 pips (+0.79%).

CAD – The Loonie wasn’t able to cash in on the overall risk appetite, likely due to its already strong uptick from the U.S. session.

USD/CAD inched 38 pips higher (+0.28%), CAD/JPY slipped by 39 pips (-0.46%), and GBP/CAD went up by 60 pips (+0.32%).

Watch Out For:

  • 6:45 am GMT: Switzerland quarterly GDP (0.2% expected vs. 0.0% previous)
  • 8:00 am GMT: Spanish unemployment change (0.2K expected vs. 57.2K previous)
  • 9:30 am GMT: U.K. construction PMI (55.5 expected vs. 55.0 previous)
  • 10:00 am GMT: Euro Zone PPI (-0.9% expected vs. -0.8% previous)

See more:

U.S. Session Forex Recap

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