Asian Session Forex Recap – June 8, 2016

  • Japan’s current account surplus narrows down from 1.89T JPY to 1.63T JPY
  • Japan’s final GDP for Q4 2015 adjusted from 0.4% to 0.5%
  • Jpana’s bank lending continues to grow by 0.2% in May
  • Australia’s home loans up by 1.7% vs. 2.6% growth expected, 0.7% decline last month
  • China’s trade surplus up to $49.98B in May vs. $45.6B in April
  • PBoC’s research bureau downgrades China’s trade forecasts

It was a topsy-turvy trading session for forex traders, as they priced in risk sentiment from the previous sessions and a couple of economic reports.

Major Events:

Japan’s data dump – A couple of hours ago Japan printed its current account and final GDP numbers. The latter got more attention though, as growth in Q1 2016 got revised from 0.4% to 0.5%. The better-than-expected release alleviated concerns over more easing from the BOJ and pushed the yen higher in the charts.

China’s trade balance – The biggest story of the hour is China’s trade balance release. Exports in the world’s second largest economy fell by 4.1% from a year earlier in May, much higher than April’s 1.8% decline and the expected 3.6% dip. Imports fared a bit better, however, thanks in part to higher global commodity prices. It only edged 0.4% lower against the expected 6.0% slide and 10.9% downtick in April.

This left China’s trade surplus at $49.98B, wider than April’s $45.56B reading but still missing the expected $58B market forecasts. Analysts point to weak demand from abroad and overall weakness in global growth as the main reasons for the miss.

The People’s Bank of China (PBoC)’s researchers support these claims, as they’ve also downgraded their export forecasts. The research bureau now expects exports to fall 1.0% in 2016 against its previous expectations of a 3.1% increase. They still expect GDP to grow by 6.8% this year though, so market players weren’t too bummed by the miss in exports figures.

Oil makes fresh 2016 highs – A report from the American Petroleum Institute (API) just after the U.S. session close reflects a decline of 3.6 million barrels in inventory, higher than the 2.7 million decrease expected. The drop in supply pushed oil prices higher with U.S. oil hitting new 2016 highs at $50.56. Meanwhile, Brent crude oil popped up to $51.56 before settling lower to $51.50.

Major Market Movers:

JPY – An upward revision to Japan’s GDP pushed the yen higher at the start of the session, but the low-yielding currency lost momentum when risk appetite took over the markets.

USD/JPY fell to a low of 106.72 before recovering to 107.02, EUR/JPY fell to 121.32 before rising back up to 121.72, and GBP/JPY slipped to 155.18 before closing at 155.72.

Watch Out For:

  • 8:15 am GMT: Switzerland’s monthly CPI expected to grow by 0.2% vs. 0.3% previous
  • 9:30 am GMT: U.K. manufacturing production (0.0% expected vs. 0.1% previous)
  • 9:30 am GMT: U.K. industrial production (0.0% expected vs. 0.3% previous)

See more:

U.S. Session Forex Recap

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