U.S. Session Forex Recap – Feb. 3, 2016

  • FOMC member George: Rate hike subject to economic outlook
  • New Zealand dairy price index down by 7.4%
  • NZ quarterly employment up by 0.9% vs. 0.8% forecast
  • NZ jobless rate fell from 6.0% to 5.3% in Q4 2015
  • API reported an increase of 3.837 million barrels in oil stockpiles
  • WTI crude oil dropped back below $30/barrel

Risk-off vibes seem to be creeping back in the forex market, as safe-haven currencies advanced while the comdolls lagged behind.

Major Events:

Oil oversupply concerns… again! – Crude oil reports continued to hog the spotlight and affect overall market sentiment, as the latest report from the American Petroleum Institute reflected a buildup in stockpiles. Oil inventories rose by 3.837 million barrels last week while other energy supplies also showed a buildup.

WTI crude oil fell back below $30/barrel to the $29.50/barrel levels and Brent crude oil slid to $32/barrel. Credit ratings agency S&P then announced another round of downgrades in their outlook for oil companies, including Chevron, Exxon, and Southwestern Energy.

New Zealand GDT auction and jobs data – In the latest Global Dairy Trade auction in New Zealand, dairy prices chalked up another sharp drop of 7.4%, worse than the previous 1.4% fall. Keep an eye out for another possible downgrade in Fonterra payout forecasts.

New Zealand quarterly employment report – Headline jobs figures came in stronger than expected, as the quarterly employment change indicated a 0.9% gain versus the projected 0.8% increase while the unemployment rate slid down from 6.0% to 5.3% instead of rising to the estimated 6.1% figure.

However, a closer look at the components of the report reveals that the “improvement” in the jobless rate was actually caused by a sharp drop in labor force participation. Annual wage inflation was also weak, with the labor cost index falling to 1.5%.

Major Currency Movers:

USD – The Greenback made a bunch of strong moves here and there, but it actually chalked up a mixed performance against its forex peers.

USD/JPY retreated below 120.00 to a low of 119.64, USD/CHF is down to 1.0176, and EUR/USD bounced back up to a high of 1.0936. Meanwhile, AUD/USD is down to .7012 and USD/CAD is testing the resistance at 1.4100 after previously dipping below 1.4000.

Watch Out For:

  • 12:30 am GMT: Australian trade balance (-2.45B AUD expected, -2.73B AUD previous)
  • 1:45 am GMT: Chinese Caixin services PMI (50.5 expected, 50.2 previous)

See more:

Asian Session Recap

London Session Recap

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