Asian Session Forex Recap – Sept. 29, 2016

  • Japan’s retail sales (y/y) down by 2.1% in August vs. 1.7% decline expected, 0.2% slip in July
  • OPEC deal continues to inspire risk appetite

Risk-taking was the name of the game during the Asian session, as forex traders continued to price in the deal between the world’s largest oil producers.

Major Events:

Post-OPEC party – There were barely any economic reports today, but high-yielding currencies were on fire for most of the trading session. If you’ve missed the bulletin, then you should know that the world’s largest oil producers have agreed to cut their production. Though details will still be hashed out in the November 30 OPEC meeting, market players are already cheering the first agreement among the members since 2008.

Not surprisingly, market bulls went out to play. Brent crude oil is now up to $49.23 per barrel while U.S. crude oil prices also edged higher to $47.13. Asian bourses followed suit with Australia’s ASX now by up by 1.05%, Hang Seng up by 0.40%, the Shanghai index up by 0.51%, and Nikkei up by a nice 1.76%.

Japan’s retail sales release – Consumer spending data from the Land of the Rising Sun revealed the first decline in three months in August. Retail sales fell by 1.1% from July after seeing a 2.5% uptick. Market geeks had expected a 0.6% increase for the month.

Some analysts point out that bad weather and fewer weekends could’ve factored in the decline. Still, the numbers don’t bode well for Shinzo Abe and other Japanese officials who are already facing an uphill battle against deflation.

Major Market Movers:

JPY – The low-yielding yen got one-two punched by overall risk appetite and a miss in Japan’s retail sales report.

USD/JPY is up by a whopping 70 pips (+0.70%) to 101.36, EUR/JPY shot up by 98 pips (+0.87%) to 113.86, and AUD/JPY rose by 67 pips (+0.87%) to 78.04.

Comdolls – Commodity-related currency traders loved the historic OPEC deal that came out of their meeting. With the rise in gold and oil prices came the increases in bullish comdoll prices.

AUD/USD is up by 11 pips (+0.14%) to .7697, USD/CAD fell by another 47 pips (-0.36%) to 1.3063, and NZD/USD inched up by 25 pips (+0.34%) to .7301.

Watch Out For:

  • 6:35 am GMT: BOJ Governor Kuroda to give a speech in Tokyo
  • 7:00 am GMT: Spanish flash CPI (y/y) (0.1% expected, -0.1% previous)
  • 7:55 am GMT: German unemployment change (-5K expected, -7K previous)
  • 8:30 am GMT: U.K. net individual lending (4.0B EUR expected, 3.8B EUR previous)
  • 8:30 am GMT: U.K. mortgage approvals (60K expected, 61K previous)

See also:

U.S. Session Recap
London Session Recap

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