U.S. Session Recap – February 11, 2014

  • Canadian housing starts at 180K vs. 184K consensus
  • Goldman Sachs analyst expects Chinese economic growth to slow down
  • PBOC predicts more volatility in money market rates, higher borrowing costs
  • Japanese banks on holiday today
  • U.K. BRC retail sales monitor up by 3.9% year-on-year
  • Australian NAB business confidence up from 6 to 8
  • Australian home loans down by 1.9% vs. expected 0.5% increase
  • Australian quarterly HPI up by 3.4%

Price action was unusually quiet in the latest trading session, as major currency pairs took a break from the post-NFP chaos. EUR/USD edged carefully above the 1.3650 minor psychological level while GBP/USD struggled to hold on to the 1.6400 mark. Data was also light as the only release was Canada’s housing starts, which showed a weaker than expected 180K increase versus the 184K consensus.

There was some buzz from China, as the PBOC announced that they are expecting more volatility in money market rates in the near term and that they predict borrowing costs will continue to rise. This reminded traders of the looming possibility of a default in the world’s second largest economy, weighing on risk appetite and equity markets of emerging nations. Goldman Sachs Chief Economist Jan Hatzius echoed this downbeat sentiment in forecasting that China will undergo weaker economic performance this year and the next.

Fresh off the press are mixed reports from Australia, with the quarterly HPI printing a stronger than expected 3.9% increase in house prices and the home loans data showing a 1.9% decline. What seemed to have a bigger impact on Aussie price action though was the NAB business confidence report, which showed an improvement from 6 to 8.

No other economic reports are up for release in the next few hours so make sure you keep tabs on headlines that could push market sentiment around. Bear in mind that Japanese traders are on holiday so the low liquidity in today’s Asian trading session could spur more volatile moves. Stay on your toes!

See also:

London Session Recap

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