Asian Session Forex Recap – Mar. 3, 2016

  • AU trade balance shows 2.94B AUD deficit, lower than the 3.22B AUD deficit expected and last month’s 3.52B AUD figure
  • Caixin services PMI down from 52.4 to 51.2 vs. 52.6 expected

Forex traders were big risk-takers during the Asian session, as they pushed high-yielding currencies higher despite mixed reports printed during the session.

Major Events:

Australia’s trade data – The Land Down Under scored another point in favor of the bulls when it printed its trade balance data. The report showed a deficit of 2.9B AUD in January, lower than December’s 3.52B AUD deficit and the 3.1B AUD figure that analysts had expected.

We don’t have far to look for the culprit. Exports popped up by 1.0% during the month while imports fell at a similar rate. Market players are pointing to cheaper oil imports throughout the month while the price of Australia’s major commodity exports fared a bit better in the global markets.

China’s weaker-than-expected services PMI – Growth in China’s services industry slowed in February, with Caixin’s PMI now down to 51.2 from January’s 52.4 figure. Read Forex Gump’s cheat sheet to know why you should care about PMIs!

Overall Caixin’s survey suggested that the weakness in the manufacturing sector is starting to drag on the services industry. While services companies continued to absorb workers who had been laid off due to contraction it the manufacturing sector, it’s doing so at a slower rate. Yikes!

Unstoppable risk appetite – Not even China’s weak services PMI and the possibility of more oil supply glut was enough to stop the bulls from charging today. Oil prices continued to trudge higher, and kept the bullish momentum that we have been seeing for the past couple of trading days. At lunch break Nikkei was up by 0.93%, Shanghai was up by 0.23%, Hang Seng was slightly down by 0.45%, and Australia’s ASX was up by 1.13%.

Major Currency Movers:

JPY – Thanks to the relentless risk appetite, the low-yielding yen received a couple of punches against its major counterparts.

USD/JPY jumped by 66 pips (+0.58%), EUR/JPY is up by 65 pips (+0.53%), GBP/JPY popped up by 97 pips (+0.61%), and AUD/JPY rocketed by 57 pips (+0.69%).

Comdolls – Strength in commodity and equities markets translated to gains for the commodity-related currencies, and pushed the Aussie, Loonie, and Kiwi higher against the Greenback.

AUD/USD inched 10 pips higher (+0.14%), USD/CAD slipped by 14 pips (+0.10%), and NZD/USD hit a session high of .6698 before settling back to its open price.

Watch Out For:

  • 7:00 am GMT: U.K. Nationwide house price index
  • 8:15 am GMT: Spanish services PMI (53.9 expected vs. 54.6 previous)
  • 8:30 am GMT: Halifax house price index (0.1% expected vs. 1.7% previous)
  • 8:45 am GMT: Italian services PMI (52.7 expected vs. 53.6 previous)
  • 8:50 am GMT: French final services PMI (expected to remain at 49.8)
  • 8:55 am GMT: German final services PMI (55.1 expected vs. 55.6 previous)
  • 9:30 am GMT: U.K. services PMI (55.1 expected vs. 55.6 previous)
  • 10:00 am GMT: Euro Zone retail sales (0.1% expected vs. 0.3% previous)

See more:

U.S. Session Forex Recap

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