Asian Session Forex Recap – May 31, 2016

  • Japan’s household spending (y/y) down by 0.4% vs. 1.3% decline expected, -5.3% previous
  • Japan’s unemployment rate remains at 3.2% as expected
  • Japan’s industrial production grows by 0.3% vs. 1.4% decline expected, 3.8% rise in March
  • New Zealand’s ANZ business confidence jumps from 6.2 to 11.3 in May
  • Australia’s building approvals grows by 3.0% vs. 3.1% decline expected, 2.9% uptick previous
  • Australia’s current account deficit widens from 22.6B AUD to 20.8B AUD
  • Australia’s private sector credit rises by 0.5% as expected vs. 0.4% growth in March
  • Japan’s housing starts (y/y) jumps by 9.0% in April vs. 8.4% previous

The Greenback gave back a couple more pips to its higher-yielding counterparts, as positive risk sentiment dominated the Asian forex trading session.

Major Events:

Mixed data from Japan – Yen traders had a lot to price in today with Japan printing tons of top and mid-tier reports. Household spending only slipped by 0.4% in April, less than the 1.4% decline that market players had been expecting. Meanwhile, the housing starts in April jumped by 9.0% against the 8.4% annualized figure for March.

Employment reports also added to the optimism as the unemployment rate remained at 3.2% as expected. Not only that, but the jobs-to-applicants ratio had also clocked in at 1.34, higher than the expected 1.30 figure.

Not all reports were rainbows and unicorns though. Industrial production, a known leading indicator for Japan’s GDP, showed a 0.3% growth in April. It wasn’t as bad as the 1.4% decline that many had expected, but it also wasn’t as strong as the 3.8% uptick in March.

Australia and New Zealand’s data dump – Data from Australia and New Zealand encouraged appetite for the comdolls. New Zealand’s building consents jumped by 6.6% in April after dropping by a whopping 97% in March while the ANZ business confidence survey clocked in at 11.3 after showing a 6.2 index figure in March.

Not to be upstaged, the Land Down Under also saw decent figures on its building approvals (+3.0% vs. -3.1% expected) and private sector credit (0.5% vs. 0.4% previous) reports. Only the current account report dimmed the good vibes when it printed a 20.8B AUD deficit against the 19.3B AUD deficit expected.

Another anti-Brexit poll – The latest ORB poll showed the anti-Brexit votes leading at 51% while the pro-Brexit voters are lagging at 46%. As Forex Gump pointed out, the pound bulls just love to hear about anti-Brexit headlines.

Major Market Movers:

Comdolls – Positive reports from both Australia and New Zealand as well as a bit of uptick in oil prices boosted the commodity-related dollars against the Greenback.

AUD/USD jumped by 61 pips (+0.85%), USD/CAD slipped by 23 pips (-0.18%), and NZD/USD rocketed by 32 pips (+0.48%).

JPY – The yen got one-two-punched by Japan’s mixed data and a bit of risk appetite in the markets.

USD/JPY hit a bottom of110.80 before recovering to 111.16, EUR/JPY slipped to 123.52 before shooting up to 123.76, and GBP/JPY recovered from a low of 162.16 to trade at 162.13.

GBP – The pound snuck in a couple of pips across the board thanks to another ORB report showing the lead of the anti-Brexit voters.

GBP/USD shot up by 36 pips (+0.25%), GBP/JPY popped up by 44 pips (+0.27%), and EUR/GBP slipped by 24 pips (+0.32%).

Watch Out For:

  • 6:00 am GMT: German retail sales (1.0% expected vs. -1.1% previous)
  • 6:45 am GMT: French preliminary CPI (0.3% expected vs. 01% previous)
  • 7:55 am GMT: German unemployment change (-4K expected vs. -16K previous)
  • 8:00 am GMT: Italy’s unemployment rate
  • 9:00 am GMT: Euro Zone’s headline and core flash CPI estimates
  • 9:00 am GMT: Italy’s preliminary CPI (0.2% expected vs. -0.1% previous)
  • 9:00 am GMT: Euro Zone unemployment rate expected to remain at 10.2%

See more:

U.S. Session Forex Recap

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