Asian Session Forex Recap – Nov. 30, 2016

  • Japan’s preliminary industrial production up by 0.1% vs. 0.2% expected, 0.6% previous
  • NZ ANZ business confidence down from 24.5 to 20.5
  • AU building approvals drops by 12.6% in October vs. 2.2% uptick expected, September’s 9.3% decline
  • AU private sector credit (y/y) up by 0.5% vs. 0.4% expected and previous
  • Japan’s housing starts (y/y) shoots up by 13.7% vs. 11.5% uptick expected, 10.0% previous

Uncle Sam’s strong GDP report translated to gains for the Greenback during the Asian session, though its gains were limited by concerns ahead of today’s OPEC meetings.

Major Events:

Australia’s weak building approvals – Data released from the Land Down Under revealed a whopping 12.6% decline in building approvals in October, much faster than September’s 9.3% drop and missing expectations of a 2.2% uptick. Compared to a year ago, approvals have dropped by 24.9%, its largest decline since October 2011.

A closer look paints a picture of broad-based weakness, with approvals down in all states and territories except the ACT. This raises concerns that Australia’s housing boom is ending its bullish cycle. Remember that earlier this month Australia’s HIA had warned that “Australia’s residential building boom is likely to slow sharply over the next two years.

Considering the volatile nature of the report though, analysts are choosing to adopt a wait-and-see approach. Keep an eye out for related reports that would point to further weaknesses in Australia’s housing market!

More USD rallies – After showing slight weaknesses earlier this week, the Greenback is back to gaining pips against its counterparts.

As I’ve mentioned in my U.S. session recap, Uncle Sam’s upwardly revised GDP report and a much better print in the U.S. consumer confidence report reinvigorated the dollar bulls. Of course, it also didn’t hurt that overall cautiousness ahead of the OPEC meetings limited the demand for higher-yielding bets.

Australia’s A SX 200 is down by 0.31%, the Shanghai index is down by 1.16%, Hang Seng is up by 0.34%, and Nikkei is hanging in there with a 0.01% gain.

Meanwhile oil prices are reflecting investors’ optimism that the OPEC meeting will yield positive results. Brent crude oil is up by 0.82% to $45.60 while U.S. crude oil prices is also up by 0.93% to $47.75.

Major Market Movers:

USD – The dollar took advantage of Uncle Sam’s positive reports as well as a slightly risk averse trading environment during the Asian session.

EUR/USD is down by 14 pips (-0.13%) to 1.0632, USD/JPY is up by 30 pips (+0.27%) to 112.62, GBP/JPY is down by 24 pips (-0.19%) to 1.2480, and USD/CHF is up by 18 pips (+0.18%) to 1.0131.

AUD – Aussie traders were spooked by Australia’s weak building approvals report and were spurred into action by overall risk aversion in the markets.

AUD/USD is down 17 pips (-0.23%) to .7472 and AUD/NZD is down by 47 pips (-0.45%) to 1.0455. AUD/JPY, which was boosted by USD/JPY’s price action, is now at 84.16 after falling to a session low of 83.98.

Watch Out For:

  • 8:00 am GMT: Switzerland’s UBS consumption indicator
  • 8:00 am GMT: German retail sales (1.0% expected, -1.4% previous)
  • 8:00 am GMT: U.K. bank stress test results
  • 8:00 am GMT: BOE financial stability report
  • 8:00 am GMT: U.K. Financial Policy Committee (FPC) statement
  • 8:45 am GMT: French preliminary CPI (-0.1% expected, 0.0% previous)
  • 9:00 am GMT: OPEC meetings officially start
  • 9:00 am GMT: KOF economic barometer (104.3 expected, 104.7 previous)
  • 9:55 am GMT: German unemployment change (-6K expected, -13K previous)
  • 11:00 am GMT: Euro Zone flash CPI (0.6% expected, 0.5% previous)
  • 11:00 am GMT: Euro Zone core CPI expected to remain at 0.8%
  • 11:00 am GMT: Italian preliminary CPI (-0.2% expected, -0.1% previous)

See also:

U.S. Session Recap
London Session Recap

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