Asian Session Forex Recap – Oct. 6, 2016

  • China’s banks still on Golden Week holiday
  • AU trade deficit narrows down from 2.12B AUD to 2.01B AUD in August

Risk aversion was the name of the game during the Asian session, as forex traders take profits from their positions from the last couple of days.

Major Events:

Mixed risk sentiment –Asian bourses ended the day in the green after Uncle Sam’s ISM non-manufacturing PMI hinted at a strong NFP reading on Friday. Australia’s ASX is up by 0.55%, Hang Seng is up by 0.60%, and Nikkei, still supported by a weaker yen, is up for a fourth straight day, this time by another 0.59%.

Oil prices weren’t as lucky despite an earlier report of a larger-than-expected draw in crude oil inventories. Brent crude oil is down by 0.52% to $51.59 while U.S. crude oil prices also slipped by 0.54% to $49.56.

Australia’s trade balance report – The Land Down Under reported a 2.01B AUD deficit in August, which is lower than its downwardly revised 2.12B AUD gap in July and analysts’ expectations of a 2.30B AUD deficit.

Imports and exports were mostly unchanged, though the increase in exports of metal ores and minerals and the decrease in the value of intermediate and other merchandise goods contributed to the recording of the smallest trade deficit since April.

The yield on Australia’s 10-year Treasury note also made the headlines, as it rose by 1 basis point to 2.177% while the 15-year note also jumped by 1 basis point to 2.541% on the prospect of a strong NFP release on Friday.

Major Market Movers:

USD – The dollar killed it across the board after a U.S. ISM non-manufacturing report pointed to a potentially strong NFP release on Friday.

EUR/USD inched 4 pips lower (-0.04%) to 1.1201, GBP/USD slipped by 18 pips (-0.14%) to 1.2727, and USD/CHF is up by 8 pips (+0.08%) to .9752.

AUD – The Aussie found no respite against its counterparts despite a better-than-expected Australian trade data release.

AUD/USD is down by 13 pips (-0.17%) to .7597, AUD/NZD is down by 17 pips (-0.16%) to 1.0606, and AUD/JPY is down by 23 pips (-0.29%) to 78.65.

Watch Out For:

  • 6:00 am GMT: German factory orders (0.3% expected, 0.2% previous)
  • 7:15 am GMT: Switzerland’s CPI (0.2% expected, -0.1% previous)
  • 8:10 am GMT: Euro Zone retail PMI
  • 8:30 am GMT: U.K.’s quarterly housing equity withdrawal (-5.4B GBP expected, -4.9B GBP previous)

See also:

U.S. Session Recap
London Session Recap

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