Asian Session Forex Recap – Jan. 27, 2016

  • Australian MI leading index down by another 0.3% like last month
  • Australian quarterly CPI up by 0.4% vs. 0.3% expected, 0.5% previous
  • Australia annualized CPI up by 1.7% vs. 1.6% expected, 1.5% previous
  • Australia trimmed mean quarterly CPI up by 0.6% vs. 0.5% expected, 0.3% last month

A pretty mixed trading session for forex traders, thanks to a bit of risk aversion creeping in ahead of today’s major economic reports.

Major Events:

Australia’s inflation data – Not on our turf! The Land Down Under brought life back to the Aussie when its consumer price reports pointed to strength in Q4 2015. If you recall, major central banks like the ECB and BOC have especially mentioned their struggles with inflation. The strong numbers eased concerns of a possible RBA rate cut and provided a boost for the high-yielding Aussie in the first hours of the release.

Quarterly CPI came in at 0.4% when market players had been expecting a 0.3% growth while the annualized figure clocked in at 1.7% after last quarter’s 1.5% figure. Tobacco (+7.4%) and domestic travel (+5.9%) led the gainers while automotive fuel (-5.7%) and telecommunication (-2.4%) dragged the numbers.

China-Hong Kong trade gap widens – The gap between China’s exports to Hong Kong and Hong Kong’s registered imports from China have widened to $22.3B in December, the widest since March 2013. China logged in $46B worth of imports to Hong Kong but the Hong Kong Government Information Center had only tallied $23.7B worth of imports from China.

Though there are factors like the method of recording and the goods included in the report (Hong Kong doesn’t include gold), the large discrepancy was enough to suggest that China’s better-than-expected trade numbers in December is mostly due to fake invoicing. Yipes!

Mixed commodities trading – The rally in oil prices caught a bump during the Asian session when U.S. oil saw a bit of profit-taking while Brent crude extended its rally. U.S. oil traders could be bracing for the EIA weekly stockpiles report out in a few hours while Brent crude oil traders are still riding on supply cut talks. The former is currently down by 1.48% to $30.98 while Brent is up by 2.17% to $32.28. Meanwhile, gold traded almost flat during the session (+0.04%), likely due to investors staying in the sidelines ahead of today’s FOMC statement.

Major Currency Movers:

AUD – The Aussie caught a train up the charts before a bit of risk aversion shaved a few pips from its intraday rallies.

AUD/USD recovered from a session low of .6993 to trade at .7041 before settling to .7021 while AUD/JPY popped up from its 82.71 low to trade at 83.36 before capping the session at 83.08.

JPY – The low-yielding yen took advantage of the overall risk aversion theme and gained a few pips across the board.

USD/JPY fell by 14 pips (-0.12%), EUR/JPY is down by 6 pips (-0.05%), and GBP/JPY slipped by 37 pips (-0.22%)

Watch Out For:

  • 7:00 am GMT: German GfK consumer sentiment (expected at 9.3 vs. 9.4 previous)
  • 7:00 am GMT: Switzerland UBS consumption indicator (last at 1.66)
  • 7:00 am GMT: U.K. Nationwide house price index (0.6% expected vs. 0.8% previous)
  • 9:30 am GMT: U.K. BBA mortgage approvals (45.5K expected vs. 45.0K previous)

See more:

U.S. Session Forex Recap

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