Asian Session Forex Recap – Nov. 8, 2016

  • AU NAB consumer confidence up by 4 vs. 6 previous
  • China’s trade surplus (CNY): 325B in October vs. 366B expected, 278B previous
  • China’s trade surplus (USD): 49.06B vs. 51.70B expected, 41.99B previous

Ho-hum. Forex price action was as tight as the U.S. Presidential elections, as market players trade cautiously ahead of the anticipated U.S. event.

Major Events:

China’s trade numbers – Data from the world’s second largest economy revealed disappointing trade numbers, as exports fell much faster than imports.

China’s trade surplus in October came in at 325B CNY, better than September’s 278B CNY surplus but missing the expected 366B CNY figure. Exports declined by 3.2% from a year earlier (vs. 5.6% drop in September) and clocked in its second month of contraction, while imports shot up by 3.2% in the same time frame after rising by 2.2% in September.

In dollar terms, exports fell by 7.3% from a year earlier (vs. -6.0% expected) while imports only slipped by 1.4% after declining by 1.9% in September. This translated to a surplus of $49.06B in October, up from $42.0B in September, but missing $51.07B surplus expectations. The Chinese yuan has depreciated by 7% from a year earlier, which explains the discrepancy between USD and CNY-denominated figures.

Overall, the numbers are consistent with a slowdown in global demand and bits of improvement in China’s manufacturing and services industries. This is probably why Chinese economy-related currencies like the Aussie and Kiwi gained a couple of pips at the report’s release.

Cautious trading ahead of U.S. elections – Asian bourses traded tightly during the session, as market players await the U.S. Presidential election results. See, though many have priced in a Clinton win, they also recognized that a Trump win could not be ruled out given how tight the polls are and how surprising the Brexit vote was.

Australia’s A SX 200 is up by 0.13%, Hang Seng is up by 0.38% Nikkei is up by 0.01%, and the Shanghai index is up by 0.72%.

Major Market Movers:

Comdolls – A bit of risk aversion took its toll on commodity-related currencies, but the Aussie and Kiwi soon gained ground after China’s trade numbers were released.

AUD/USD fell to a low of .7689 before taking a breather at .7699 while NZD/USD dropped to .7318 before ending up at .7325.

JPY – The low-yielding yen took advantage of a bit of profit-taking from riskier positions ahead of the U.S. elections.

USD/JPY inched 12 pips lower (-0.12%) to 104.47, GBP/JPY is 24 pips lower (-0.19%) at 129.45, and EUR/JPY is 13 pips lower (-0.11%) at 115.32.

Watch Out For:

  • 7:45 am GMT: Swiss unemployment rate expected to remain at 3.3%
  • 8:00 am GMT: German industrial production (-0.4% expected, 2.5% previous)
  • 8:00 am GMT: German trade balance (23.4B EUR expected, 22.2B EUR previous)
  • 8:45 am GMT: French government budget balance
  • 8:45 am GMT: French trade balance (-4.1B EUR expected, -4.3B EUR previous)
  • 10:30 am GMT: U.K. manufacturing production (0.5% expected, 0.2% previous)
  • 10:30 am GMT: U.K. industrial production (0.1% expected, -0.4% previous)

See also:

U.S. Session Recap
London Session Recap

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