Asian Session Forex Recap – Nov. 7, 2016

  • FBI clears Clinton…again
  • AU AIG construction index down from 51.4 to 45.9
  • BOJ’s monetary policy meeting minutes show doubts over inflation timeline
  • Japan’s average cash earnings at 0.2% as expected vs. 0.0% previous
  • AU ANZ job ads up by 1.0% vs. -0.3% previous

Risk appetite was the name of the game during the Asian session, as the FBI cleared Clinton’s emails and oil prices rose on news of an earthquake.

Major Events:

FBI clears Clinton emails – The biggest story of the hour was the U.S. Federal Bureau of Investigation (FBI) clearing Hillary Clinton of criminality over the latest set of leaked emails. In a letter to Congress, FBI director James Comey said that the newly-discovered emails didn’t change the office’s conclusion that no charges were warranted against Clinton.

Risk appetite jumped on the news, as the report increased chances of a Clinton presidency, which generally represents continuity of current policies.

  • Australia’s A SX 200 is up by 1.35% to 5,250.80
  • Hang Seng is up by 0.54% to 22,765.00
  • Shanghai index is up by 0.18% to 3,131.01 and
  • Nikkei is up by 1.62% to 17,179.50

Earthquake in Oklahoma? – Earlier today a 5.0-magnitude earthquake struck some 2km west of the town of Cushing, Oklahoma and caused some structural damages. This is a big deal for oil traders, as this is where a lot of U.S. oil storage facilities are located. The news, fueled by an overall risk-friendly trading environment, helped push oil prices higher:

Brent crude oil is up by 1.40% to $46.22 while U.S. crude oil prices is up by 1.54% to $44.75.

Jawboning from a Japanese official – A few hours earlier, Vice Minister of Finance Masatsugu Asakawa tried to jawbone the yen by saying that they’re concerned about “disorderly FX movements,” and that they may have to act if they see “speculative movements in FX.”

The sentiment is nothing new, but it might have helped lessen the impact of the latest BOJ meeting minutes suggesting that its own members aren’t too confident on their current policies.

Major Market Movers:

USD – Not surprisingly, the Greenback gapped higher over the weekend and continued to gain pips on the back of the FBI clearing Clinton of criminality from the latest set of leaked emails.

EUR/USD opened at 1.1060 (from 1.1138 close) and was up by 21 pips (+0.19%) to 1.1081 by mid-day, while USD/JPY jumped from 102.99 to 104.06 before reaching 104.27 (+0.20%). Ditto for GBP/USD, which gapped from 1.2514 to 1.2452 before trading at 1.2458.

JPY – A burst of risk appetite did a number on the low-yielding yen, which lost pips across the board.

GBP/JPY is up by 30 pips (+0.23%) to 129.90, EUR/JPY is 37 pips (+0.32%) higher at 115.54, and AUD/JPY inched 11 pips higher (+0.14%) to 80.05.

Watch Out For:

  • 8:00 am GMT: German factory orders (0.2% expected, 1.0% previous)
  • 9:00 am GMT: Switzerland’s foreign currency reserves
  • 9:15 am GMT: Swiss CPI (0.2% expected, 0.1% previous)
  • 9:30 am GMT: U.K. Halifax house price index (0.3% expected, 0.1% previous)
  • 10:10 am GMT: Euro Zone retail PMI
  • 10:30 am GMT: Sentix investor confidence (8.7 expected, 8.5 previous)
  • 11:00 am GMT: Euro Zone retail sales (-0.3% expected, -0.1% previous)

See also:

Last Week’s Top Forex Movers

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