Asian Session Forex Recap – Sept. 9, 2016

  • AU home loans down by 4.2% vs. 1.3% decline expected, 1.7% uptick in June
  • China’s CPI up by 1.3% vs. 1.7% increase expected, 1.8% rise in July
  • China’s PPI slips by 0.8% vs. 1.0% decrease expected, 1.7% decline in July
  • Japan’s tertiary industry activity at 0.3% vs. 0.4% expected, 0.7% previous

The dollar lost pips across the board despite a generally risk averse forex trading environment. What’s up with that?!

Major Events:

China and Australia’s reports – Earlier today Australia printed its home loans numbers, which showed a 4.2% decline approvals in July. The report is known to show volatile readings though, so there wasn’t much reaction from Aussie bulls and bears. Analysts had been only expecting a 1.3% slip after an upwardly revised 1.7% uptick in June.

Meanwhile China’s monthly CPI came in at -1.3% in August, lower than the expected 1.7% increase and marks the fourth consecutive monthly decline and lowest reading since October 2015. On an annualized basis, consumer prices advanced by 1.3% (vs. 1.7% growth estimates) following a 1.8% increase in July.

Traders investors mostly focused on the PPI release though, which only slipped by 0.8% after declining by 1.7% in July. Overall the fading producer price deflation raised hopes of stronger corporate earnings in the future while the low CPI reading left more room for the government to introduce more stimulus. Not a bad deal!

Kuroda’s meeting with Abe – Market players tuned back into the BOJ show after the ECB disappointed their expectations yesterday. See, BOJ Governor Kuroda just had a huddle with PM Shinzo Abe, which is a big deal when many are expecting the central bank to unlock more monetary stimulus for the economy.

Kuroda hit the newswires shortly after, saying that he and the PM only discussed the domestic economy, overseas developments, and the BOJ’s comprehensive review scheduled this month. What they did NOT discuss were possibilities of buying foreign bonds and other “special instructions” on monetary policy. Move along, stimulus hunters. Nothing to see…yet.

Major Market Movers:

USD – The dollar lost pips across the board despite a relatively risk-averse trading session.

EUR/USD rose by 17 pips (+0.15%) to 1.1275, GBP/USD is up by 26 pips (+0.20%) to 1.3324, and USD/CHF is down by 11 pips (-0.11%) to .9717.

JPY – Whether it’s North Korea possibly conducting another nuclear test or the overall risk aversion in the Asian bourses, the yen ended up rising against most of its counterparts.

USD/JPY is down by 34 pips (-0.33%) to 102.21, EUR/JPY is down by 16 pips (-0.14%) to 115.24, and GBP/JPY is down by 16 pips (-0.12%) to 136.18.

Watch Out For:

  • 5:45 am GMT: Swiss unemployment rate expected to remain at 3.3%
  • 6:00 am GMT: German trade surplus to slip from 21.7B EUR to 21.2B EUR?
  • 6:45 am GMT: French government budget balance
  • 6:45 am GMT: French industrial production (0.2% expected, -0.8% previous)
  • 8:30 am GMT: U.K. goods trade balance (-11.7B GBP expected, -12.4B GBP previous)
  • 8:30 am GMT: U.K. construction output (-1.0% expected, -0.9% previous)
  • 8:30 am GMT: U.K. consumer inflation expectations

See also:

U.S. Session Recap
London Session Recap

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