Asian Session Forex Recap – Nov. 3, 2016

  • Japanese markets out on Culture Day holiday
  • NZ ANZ commodity prices up by 0.7% vs. 5.1% uptick in September
  • AU trade deficit clocks in at 1.23B AUD vs. 1.71B expected, 1.89B AUD in August
  • China’s Caixin services PMI up from 52.0 to 52.4 vs. 52.5 expected

Another jittery session for forex traders! With not a lot of data on the docket, Asian session traders continued to price in a nail-biting U.S. Presidential election.

Major Events:

Australia’s trade balance – Data from the Land Down Under saw a 1.23B AUD trade deficit in September, which is not only lower than the expected 1.71B figure and 1.89B shortfall in August, but also marks the smallest gap since December 2014.

Exports popped up by 2.0%, the highest in a year, even as non-monetary gold exports fell by a whopping 19%. A closer looks reveals that it was the surge in the value of coal exports and other mineral fuels that drove exports higher. Meanwhile imports fell by 1.0% as the value of consumption and capital goods fell for the month.

Overall the numbers suggest that Australia could have a chance at logging in trade surpluses in the next few months if coal and iron ore prices, its largest goods exports by dollar value, continue to rise in the global markets.

Overall risk aversion – The dollar received another pummeling from its major counterparts, as Asian session traders caught up to the U.S. presidential election jitters from the U.S. session. The yen was a convenient haven for those who are taking off their dollar positions, though European currencies such as EUR, CHF, and GBP also saw some gains.

Japan’s Nikkei is out on a holiday, but Australia’s ASX 200 is down by 0.06%. Meanwhile, Hang Seng (+0.08%), the Shanghai index (+1.16%) benefited from a better-than-expected services PMI and reports that the People’s Bank of China (PBoC) is “selectively tightening” to prevent market bubbles.

Major Market Movers:

JPY – With Japanese markets out on a holiday, the flight to the low-yielding yen gained even more momentum.

USD/JPY plummeted to a low of 102.55 before capping the session at 102.62 (-0.74%) while EUR/JPY also dipped to 114.01 before closing at 114.07 (-0.55%). Ditto for GBP/JPY, which reached 126.51 before closing at 126.56 (-0.41%).

AUD – The Aussie spiked LOWER across the board despite a better-than-expected trade report from Australia. One possible reason is that stops were taken out around AUD/JPY’s 79.00 handle and fueled Aussie-selling for a bit.

Still, AUD/USD finished the first half of Asian session 15 pips higher (+0.20%) to .7665 though AUD/JPY is down by 47 pips (-0.59%) to 78.64.

Watch Out For:

  • 6:45 am GMT: SECO consumer climate (-13 expected, -15 previous)
  • 8:00 am GMT: Spanish unemployment change (77.3K expected, 22.8K previous)
  • 9:00 am GMT: ECB economic bulletin
  • 9:00 am GMT: Italian monthly unemployment rate expected to remain at 11.4%
  • 9:30 am GMT: U.K. services PMI (52.5 expected, 52.6 previous)
  • 10:00 am GMT: U.K.’s High Court to announce a ruling on whether or not the government can bypass Parliament and trigger Article 50 of the Lisbon Treaty

See also:

U.S. Session Recap
London Session Recap

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