Asian Session Forex Recap – Apr. 20, 2016

  • Japan trade balance prints 0.28T JPY surplus vs. 0.45T JPY surplus expected, 0.15T JPY surplus in February
  • Australia’s MI leading index down by 0.1% in March vs. 0.2% decline in February

Risk aversion was the name of the game during the Asian session, as forex traders priced in weaknesses in commodity prices.

Major Events:

Weak commodity prices – With the labor strike in Kuwait ending and the recent API report once again highlighting oil oversupply concerns, it’s no surprise that oil prices extended its losses today. What’s more, the overall risk aversion carried over to other commodities throughout the session.

Brent crude oil is down by 2.48% to $42.94 while U.S. oil is down by 2.50% to $41.41. Meanwhile, gold is down by 0.34% while copper is down by 1.12%.

Mixed equities performance – China’s equities markets took hits from the People’s Bank of China’s (PBoC) injecting the most cash since February 26. Australia’s ASX managed to cling to some of its gains despite the decline in gold and copper prices.

Nikkei was the star though, as it kept most of its gains even though the yen strengthened during the session. Could it be due to Bank of Japan (BOJ)’s Kuroda hinting that they could expand their QQE program further?

Major Currency Movers:

JPY – USD/JPY’s decline below the 109.00 mark and the overall risk aversion encouraged some yen bulls to step up their game.

USD/JPY is down by 17 pips (-0.16%), EUR/JPY is down by 21 pips (-0.17%), and GBP/JPY is down by 59 pips (-0.38%).

Comdolls – Weaknesses in commodity prices spilled over the forex scene and attracted the Aussie, Loonie, and Kiwi bears.

AUD/USD is down by 36 pips (-0.46%), USD/CAD is up by 56 pips (+0.44%), and NZD/USD is down by 44 pips (-0.63%).

Meanwhile, AUD/JPY is down by 53 pips (-0.62%), CAD/JPY is down by 53 pips (-0.60%), and NZD/JPY is down by 61 pips (-0.79%).

Watch Out For:

  • 6:00 am GMT: German PPI (0.2% expected vs. -0.5% previous)
  • 8:30 am GMT: U.K. average earnings index expected to remain at 2.1%
  • 8:30 am GMT: U.K. unemployment rate expected to remain at 5.1%
  • 8:30 am GMT: U.K. claimant count change expected to dip by 11.9K vs. 18K decline February
  • 9:00 am GMT: Swiss ZEW economic expectations
  • 10:00 am GMT: Draghi to speak in Frankfurt. Watch out for any hints of the ECB’s biases ahead of its decision this week!

See more:

U.S. Session Forex Recap

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