Asian Session Forex Recap – Mar. 10, 2016

  • Australia’s MI inflation expectations up by 3.4% vs. 3.6% uptick in February
  • RBNZ cuts interest rates from 2.50% to 2.25%
  • China’s CPI jumps by 2.3% in February vs.1.8% uptick expected and previous
  • China’s PPI meets expectations at -4.9% vs. -5.3% previous

Another mixed session for forex traders, as they priced in currency-specific reports and catalysts ahead of other major economic releases.

Major Events:

China’s CPI and PPI data – China’s consumer prices rose by its fastest pace since mid-2014 in February, as a cold wave pushed food prices up during the Lunar New Year and dragged the overall figures higher.

The consumer price index (CPI) rose by 2.3% from a year earlier, faster than last month’s (and expected) 1.8% uptick. However, non-food prices were limited to a 1.0% increase while services inflation slowed down. This is probably why market players mostly shrugged off the strong headline figures. Meanwhile, the PPI came in at -4.9% as expected, a bit better than last month’s 5.3% decline.

Overall risk appetite – Optimism in equities trading led market risk sentiment today, as the RBNZ’s latest interest rate cut and expectations for more ECB stimulus today spurred investors into taking on a bit of risk. It also didn’t hurt that oil prices had hit three-month highs yesterday after an inventory report reflected a bit of withdrawal.

Major Currency Movers:

USD – The Greenback snuck in a few pips against its European counterparts ahead of the ECB’s monetary policy decision.

EUR/USD fell by 24 pips (-0.22%) and GBP/USD dropped by 4198.

JPY – Japanese equities traders felt the risk appetite love and took the yen in the skies with them today. Nikkei was up by 1.39% by lunch break.

USD/JPY dropped to a session low of 113.15 before spiking back up to 113.75 while EUR/JPY also saw a rally from its 124.32 lows to 124.86. Ditto for GBP/JPY, which recovered from 160.73 to 161.50.

Comdolls – Commodity-related currencies steadied at their post-RBNZ rate cut prices, as comdoll traders shrugged off data from China.

AUD/USD is stuck in a 10-pip range near .7470, USD/CAD inched 27 pips higher despite the slip in oil prices, and NZD/USD steadied below the .6650 minor psychological area.

Watch Out For:

  • 7:00 am GMT: German trade balance (19.2B EUR surplus expected vs. 19.4B EUR last month)
  • 7:45 am GMT: French industrial production (0.8% expected vs. -1.6% previous)
  • 9:00 am GMT: Italian quarterly unemployment rate (11.5% expected vs. 11.7% previous)
  • 12:45 pm GMT: ECB’s monetary policy decision. Market players are expecting more easing, so watch out for potential volatility!

See more:

U.S. Session Forex Recap

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