Asian Session Forex Recap – Oct. 14, 2016

  • China’s CPI (y/y) up by 1.9% vs. 1.6% uptick expected, 1.3% previous
  • China’s PPI (y/y) inches 0.1% higher vs. 0.4% decline expected, 0.8% slip previous

The dollar was all over the place, as a bit of risk appetite got mixed in with more dollar strength. Here’s what was up during the Asian session!

Major Events:

China’s inflation numbers – The biggest story of the hour is China printing its annualized inflation numbers for the month of September. Consumer prices in the world’s second largest economy popped up by 1.9% from a year earlier, faster than the 1.6% growth that many were expecting and marks a four-month high for the report.

What caught more attention is the producer price index (PPI), which clocked in a 0.1% growth, its first positive reading since January 2012. This is good news for China’s trading counterparts, as higher factory-gate prices would mean higher inflation pressure for countries such as Australia, Euro Zone, and the U.S.

RBA’s financial stability review – The Reserve Bank of Australia (RBA) added to the good vibes when it printed its latest financial stability review. Not surprisingly, housing concerns took the front seat. While the central bank believes that though domestic concerns have shifted towards property development, it also said that these risks have lessened a bit over the past six months.

Mixed EIA report – Oil prices continued to feel the love despite a mixed EIA report during the U.S. session. See, the Energy Information Administration (EIA) printed that crude stocks have risen by 4.9 million barrels in the week ending October 7, its first buildup since the end of August.

However, the same report also reflected a product inventory drawdown to the tune of 3.7 million barrels for distillates and 1.9 million barrels for gasoline. Overall the mixed numbers were enough to push Brent crude oil 0.27% higher to $52.17 and U.S. oil prices 0.71% higher to $50.80.

Major Market Movers:

USD – A bit of risk aversion and expectations of a hawkish Yellen speech next week boosted the dollar higher across the board.

EUR/USD is down by 18 pips (-0.16%) to 1.1031, GBP/USD is down by 22 pips (-0.18%) to 1.2224, and USD/JPY is up by 37 pips (+0.36%) to 103.99.

AUD and NZD – Commodity-related currencies popped higher across the board as soon as China printed its CPI and PPI reports. The ghosts of yesterday’s weak trade data and a bit of profit-taking soon took over sentiment though, and dragged the comdolls lower.

AUD/USD rose to .7608 before settling back down to .7584 (-0.20%), NZD/USD shot up to .7134 before closing with only a 15-pip gain (+0.21%) to .7107.

Watch Out For:

  • 7:15 am GMT: Switzerland’s PPI report
  • 8:30 am GMT: BOE’s credit conditions survey
  • 8:30 am GMT: U.K. construction output expected to remain at 0.0%
  • 9:00 am GMT: Euro Zone trade balance expected to show 20.5B EUR surplus vs. 20.0B EUR in July

See also:

U.S. Session Recap
London Session Recap

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