Asian Session Forex Recap – Sept. 12, 2016

  • Japan’s core machinery orders rises by 4.9% in July vs. 2.8% decline expected
  • Japan’s PPI (y/y) down by 3.6% vs. 3.5% decrease expected, 3.9% downtick previous

Ho-hum. Asian session forex traders saw a pretty tight start to the trading week, as a lack of economic releases and catalysts limited volatility in the charts.

Major Events:

Overall risk aversion – Asian session equities traders tracked last Friday’s bearish party from their U.S. counterparts. If you recall, Wall Street closed in the red after Boston Fed President Rosengren backed the case for gradual tightening this year. In his speech, he warned that “holding rates at their current low level for much longer risks making labor markets too tight, forcing the Fed to raise interest rates sharply, which could result in another recession.

U.S. equities traders did NOT like the prospect of tighter policies and Asian session traders seem to agree. Nikkei dropped by 1.82%, Australia’s ASX fell by 2.22%, Hang Seng is down by 2.68%, and the Shanghai index is down by 1.94%. Talk about waking up in the wrong side of the…charts.

Oil price slide – Not even Black Crack traders are having a good day. Data from the U.S. last Friday revealed that oil drillers added MORE rigs to look for more production. Baker Hughes reported that drillers have added rigs in 10 out of the last 11 weeks, the longest streak since 2011.

The prospect of more supply spooked oil bulls into selling. Brent crude oil is down by 1.55% to $47.29 while U.S. crude oil is also down by 1.66% to $45.12.

Major Market Movers:

JPY – Overall risk aversion boosted the low-yielding yen by a few pips against its higher-yielding counterparts.

USD/JPY is down by 7 pips (-0.07%) to 102.53, GBP/JPY is down by 14 pips (-0.10%) to 135.99, and AUD/JPY closed 12 pips lower (-0.16%) to 77.24.

CAD – The oil-related Loonie took hits on the back of falling oil prices.

USD/CAD is up by 9 pips (+0.07%) to 1.3062, EUR/CAD is up by 21 pips (+0.14%) to 1.4687, and GBP/CAD is up by 10 pips (+0.06%) to 1.7330.

Watch Out For:

  • 6:00 am GMT: Japan’s preliminary machine tools orders (y/y)
  • 8:00 am GMT: Italy’s quarterly unemployment rate (11.5% expected, 11.6% previous)
  • 1:30 am GMT: U.K.’s CB leading index

See also:

Last Week’s Top Forex Movers

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