Asian Session Forex Recap – July 14, 2016

  • AU MI inflation expectations inches higher from 3.5% to 3.7% in June
  • AU unemployment rate ticks higher from 5.7% to 5.8%
  • AU employment change disappoints at 7.9K vs. 10.1K expected, 17.9K previous
  • AU new motor vehicle sales jumps by 3.1% in June vs. 1.0% decline in May
  • Cars explode in a business district in Brussels
  • RBNZ to announce its economic outlook adjustments

A lack of major economic releases and a cooldown of “helicopter money” prospects for Japan weighed on risk sentiment today and knocked the higher-yielding currencies lower across the board.

Major Events:

Car explosions in Brussels – No, it’s not the filming of the next Fast and Furious movie. Earlier today several cars burst into flames in the business district of Saint Gilles in Brussels. Speculations that it was a terrorist attack sent a wave of risk aversion in the markets, with low-yielders like the dollar and the yen raking in the most pips. The moves didn’t last long though, as the lack of confirmation on the terrorism angle sent the market bears back into their caves.

Australia’s jobs data
– The Aussie whipsawed across the board today, thanks to the latest Australian jobs numbers showing mixed results.

According to the Australian Bureau of Statistics (ABS), employment grew by a net of 7,900 in June, lower than May’s 17,900 figure and missing expectations of a 10,000 uptick. Meanwhile the unemployment rate shot up to 5.8% from 5.7% with participation rate also climbing from 64.8% to 64.9%.

Don’t just a report by its headlines though! A closer look tells us that most of the losses came from part-time jobs and that it was the gains in full-time employment that saved the day. A whopping 30,500 part-time workers lost jobs for the month after seeing a 17,900 increase in May.

Meanwhile, full-time jobs increased by 38,400, much higher than its big fat zero in the previous month. For newbies out there, you should know that full-time jobs are preferable to part-time ones as it makes consumers more secure and confident to spend their moolah.

RBNZ to update its economic outlook – The Reserve Bank of New Zealand (RBNZ) surprised Asian session players with an announcement that it would be issuing a brief update on its economic assessment. The Kiwi dropped lower, mostly because the move comes at the heels of the Bank of Canada (BOC) cutting its growth forecasts for 2016 and 2017.

The central bank added that we should now expect a monthly update to fill in the gaps between its monetary policy statements. Not surprising, since a lot has happened (and will likely happen) between the RBNZ’s last statement on June 9 and the next one on August 11.

Will the RBNZ start to set a dovish tone for the next policy announcement? Back in June the central bank hinted that it won’t be cutting its rates anytime soon. But since then Brexit has happened and major central banks like the Fed, BOJ, and BOE are expected to make changes to their own policies.

Guess we’ll have to wait to find out! The announcement is scheduled on July 21 at 9:00 am local time (9:00 pm GMT).

Oil price recovery – Oil prices took a breather today after seeing massive losses yesterday. See, a report from the U.S. Energy Information Administration (EIA) released yesterday showed oil inventories dropping less than markets had expected. Not only that, but distillate inventories have also climbed the most since January, worsening worries over an oil glut.

Major Market Movers:

JPY – Yen crosses fell across the board when news about the car explosions in Brussels hit the newswires. The pairs have gone back to their bullish ways though, thanks to a lack of confirmation of a terrorist attack.

USD/JPY is up by 18 pips (+0.17%), EUR/JPY rose by 47 pips (+0.41%), and GBP/JPY shot up by 100 pips (+0.73%).

AUD – The Aussie took advantage of Australia’s slightly better-than-expected jobs releases.

AUD/USD reached a session high of .7640 before levelling off to .7612 while AUD/JPY shot up by 24 pips (+0.30%).

Watch Out For:

  • French markets out on National Day holiday
  • 8:15 am GMT: Switzerland’s PPI (0.2% expected, 0.4% previous)
  • 12:00 pm GMT: BOE’s monetary policy decision. Will the central bank cut its rates for the first time since 2009? (Read our trading guide here)

See more:

U.S. Session Forex Recap

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