Asian Session Forex Recap – Apr. 4, 2016

  • China out on Tomb Sweeping Day holiday
  • Australia MI inflation gauge flat after 0.2% decline in February
  • Australia’s building approvals up by 3.1% in February vs. 2.1% increase expected, 6.6% decline previous
  • Australia’s retail sales disappoints with 0.0% vs. 0.4% uptick expected, 0.3% increase in January
  • Australia’s ANZ job ads up by 0.2% vs. 1.2% decline in February

It was a see-saw day for forex traders, as a burst of risk appetite fizzled out on weaker economic data, lower oil prices, and a strong yen.

Major Events:

Australia’s data dump – The Land Down Under fired the first salvo this week with its job ads, inflation estimates, retail sales, and building approvals numbers.

The inflation gauge came out flat but both the ANZ job ads and building approvals came out better than expected. Unfortunately for the bulls, forex traders had their eyes on the retail sales data, as inflation and consumer spending has been one of the RBA’s sore points on the economy.

Retail sales came out flat when many had been expecting a 0.4% growth from January’s 0.3% uptick. This is not good news especially after the unemployment rate surprisingly climbed in January. Will this lead to even less pressure for inflation to go up?

Limited trading volatility – China’s markets were out on a bank holiday, so forex trading was mostly a see-saw between risk appetite from last Friday’s strong NFP numbers and today’s Australian data. The yen had a field day though, likely due to a start of another fiscal year for Japan.

Major Currency Movers:

JPY – The low-yielding yen had a good day despite a bit of risk appetite at the beginning of the trading session. One possible explanation is that market players have started another fiscal year by taking on yen-denominated assets.

USD/JPY slipped by 13 pips (-0.12%), EUR/JPY fell by 28 pips (-0.22%), and GBP/JPY dropped by 27 pips (-0.17%).

AUD – The Aussie had a good start with the MI inflation gauge coming in better-than-expected while the building approvals report also printed strong numbers. The bullish run lasted until the retail sales report was released and the Aussie was dragged lower across the board.

AUD/USD is down 36 pips (-0.47%) and AUD/JPY is down 49 pips (-0.57%) after hitting a session high of 85.80.

Watch Out For:

  • 7:00 am GMT: Spain’s unemployment rate (21.3K expected vs. 2.2K previous)
  • 8:30 am GMT: Sentix investor confidence (6.9 expected vs. 5.5 previous)
  • 8:30 am GMT: U.K. construction PMI (54.3 expected vs. 54.2 previous)
  • 9:00 am GMT: Euro Zone unemployment rate expected to remain at 10.3%
  • 9:00 am GMT: Euro Zone PPI (-0.5% expected vs. -1.0% previous)

See more:

U.S. Session Forex Recap

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