Asian Session Forex Recap – Sept. 8, 2016

  • U.K. RICS house price balance up from 5% to 12% in August
  • Japan’s current account surplus drops from 1.65T to 1.45T JPY in July
  • Japan’s final GDP revised from 0.0% to 0.2% in Q2 2016
  • Japan’s bank lending slips from 2.1% to 2.0% in August
  • Japan’s Economy Watchers’ sentiment up from 45.1 to 45.6 in August
  • AU’s trade deficit clocks in at 2.41B AUD in July vs. 2.65B AUD expected, 3.25B AUD previous
  • China’s trade surplus inches higher from 343B CNY to 346B CNY vs. 372B CNY expected

Zzzzzzz. A pretty quiet start to the day, as Asian session forex traders barely reacted to today’s economic releases. So, which economic themes dominated the session?

Major Events:

Japan’s data dump – Data from the world’s third largest economy came in mixed today. Capital flow clocked in its 25th consecutive month in August, but came in weaker-than-expected thanks to a stronger yen and cheaper oil imports. Meanwhile, bank lending also slipped during the month.

Luckily, market players focused more on the GDP release. The report was revised higher from 0.0% to 0.2% in Q2 2016, which translates to an annualized growth of 0.7% from the previous 0.2% uptick. According to the report, upward adjustments to capital expenditure and inventories contributed to the GDP revision.

Australia and China’s trade data – The Land Down Under registered its 28th consecutive monthly trade deficit, this time coming in at 2.41B AUD against the 3.25B AUD deficit in June. A closer look tells us that exports increased by 3% after falling by 1% last month while imports are stagnant (0.0%) after rising by 2% in June.

China’s trade numbers also showed cause for celebration, as most components beat their market estimates. Exports rose by 5.9% from a year earlier in August, better than the expected and previous reading of 2.9%. Imports also shot up by 10.8%, much better than July’s 5.7% decrease and the expected 0.7% uptick.

In USD terms, exports show a 2.8% decline for the month against July’s 4.4% decline and -4.0% expected. Last but definitely not the least, imports inched 1.5% higher from a year earlier, which is way better than the 12.5% decline in the previous month. Investors paid special attention to the uptick, as it marks the first time in 21 MONTHS that imports picked up and hints at healthier domestic demand.

Rally in oil prices – Black Crack prices rose higher across the board after a U.S. inventory data clocked in its largest weekly stock draw since April 1985. Yowza!

The possibility of easing oil glut cheered oil bulls and motivated them to push Brent oil 1.73% higher to $48.80 and U.S. crude oil 0.48% higher to $46.36.

Major Market Movers:

USD – A bit of risk-taking sent the low-yielding Greenback lower against its higher-yielding counterparts.

EUR/USD is 7 pips higher (+0.06%) at 1.1250, GBP/USD is 12 pips (+0.09%) higher to 1.3349, and USD/CHF is down by 8 pips (-0.08%) to .9690.

CAD – Not surprisingly, rising oil prices pushed the oil-related Loonie higher across the board.

USD/CAD is down by 28 pips (-0.22%) to 1.2872, EUR/CAD is down by 19 pips (-0.13%) to 1.4481, and AUD/CAD is down by 22 pips (-0.13%) to 1.7182.

Watch Out For:

  • 5:30 am GMT: French final quarterly non-farm payrolls expected to remain at 0.2%
  • 11:45 am GMT: ECB’s monetary policy decision. Read Forex Gump’s trading guide before you trade the event!

See also:

U.S. Session Recap
London Session Recap

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