Asian Session Forex Recap – Apr. 11, 2016

  • Japan’s core machinery orders down by 9.2% vs. 11.8% decline expected, 15% uptick in January
  • Australia’s home loans up by 1.5% vs. 2.1% uptick expected, 4.4% decline in January
  • China’s annualized CPI up by 2.3% vs. 2.4% increase expected, 2.3% growth last month
  • China’s annualized PPI down by 4.3% vs. 4.6% decline expected, 4.9% fall in Feb

Forex traders started the week on a mixed note, as economic reports failed to produce a single economic theme throughout the session.

Major Events:

Japan’s core machinery orders – Machinery orders for the world’s third largest economy fell by 9.2% in February, worse than January’s 15% increase but still better than the expected 11.8% decline. Compared with a year earlier, orders are down by 0.7% for the month.

Since January’s orders were boosted by a large, start-of-year order of steel, investors were looking at February’s numbers for underlying trends. This month’s release hinted that capital spending is beginning to stabilize, which is good for business sentiment and the economy.

More warnings from Japanese officials – The yen gapped higher against its counterparts despite a warning over the weekend from Chief Cabinet Secretary Yoshihide Suga.

In a speech, he repeated that the government is monitoring the yen’s moves “with a sense of urgency,” and added that a G20 agreement against competitive currency devaluation does not mean that Japan wouldn’t intervene against one-sided currency moves.

China’s inflation – China’s stock prices started the week strong thanks to the consumer price index (CPI) report coming in weaker-than-expected. Inflation remained at 2.3% in March when analysts had been expecting a 2.4% growth. Meanwhile the producer price index (PPI) report inched 0.5% higher on the month but fell by 4.3% from a year earlier. The report hinted that the People’s Bank of China (PBoC) has more room to ease, which sent positive vibes to Chinese equities traders.

More gains for oil –It seems that oil bulls haven’t had enough partying just yet. Oil prices crawler a bit higher again today after an oil rig report last Friday boosted the Black Crack’s prices.

Major Currency Movers:

JPY – Suga’s comments didn’t seem to have worked on the yen, as it’s still near significant highs against its counterparts.

USD/JPY is staying just below the 108.00 handle while EUR/JPY is lollygagging just above the 123.00 mark. Even GBP/JPY is trading near its open prices despite its trek to the 153.00 area.

CAD – The Loonie gained a couple of pips from an extension of oil price increase from Friday. Of course, it also didn’t hurt that Canada had printed better-than-expected employment numbers.

USD/CAD hit a low of 1.2972 while AUD/CAD remained near its one-month lows.

Watch Out For:

  • 6:15 am GMT: BOJ’s Kuroda to give a speech in an annual meeting of trust banks
  • 8:00 am GMT: Italy’s industrial production (-0.8% expected vs. 1.9% previous)

See more:

U.S. Session Forex Recap

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