U.S. Session Forex Recap – Sept. 1, 2016

  • U.S. ADP non-farm employment change at 177K vs. 174K in Aug
  • U.S. July ADP figure upgraded from 179K to 194K
  • Chicago PMI down from 55.8 to 51.5 vs. 54.1 forecast
  • U.S. pending home sales rebounded by 1.3% vs. 0.7% consensus
  • U.S. crude oil inventories up by 2.3 million barrels
  • Canadian economy expanded by 0.6% in June

The Greenback wasn’t exactly off to a strong start for the month as U.S. economic data came in mixed while the yen continued to sink.

Major Events:

Mixed U.S. data  First, the good news. The ADP report printed stronger than expected results for August, indicating a rise of 177K in employment versus the projected 174K gain. To top it off, the July reading enjoyed a significant upgrade from the initially reported 179K increase to a 194K rise, hinting that the NFP figure for that month might also be revised higher.

U.S. pending home sales also beat expectations with a strong 1.3% rebound in July, nearly twice as much as the projected 0.7% rise. However, the June reading was downgraded to show a 0.8% drop from the initially reported 0.2% uptick.

As for the not-so-good news, the Chicago PMI chalked up a sharper than expected drop from 55.8 to 51.5, much lower than the 54.1 consensus. This means that the manufacturing industry expanded at a slower pace in August compared to July.

Upbeat Canadian GDP?  The June monthly GDP reading surprised to the upside with a 0.6% expansion, outpacing the estimated 0.4% growth figure. The June reading was also enough to make up for the previous month’s 0.6% contraction, bringing the country’s year-over-year growth to 1.1% versus the 1.0% consensus.

Things aren’t looking as bright and sunny from a quarterly perspective, though, as the Q2 GDP reading is actually down 1.6% compared to the previous quarter’s 2.5% growth figure. Components of the report revealed that the drags were mostly from the 0.5% decline in business investment, its sixth consecutive quarterly drop, and the 16.7% slump in exports. Yikes!

Major Currency Movers:

JPY – Yen weakness was still in play for another day in a row, as the lower-yielding currency was dragged lower by BOJ easing expectations.

USD/JPY climbed from 103.26 to a high of 103.55 before retreating to 103.46 (+0.19%), EUR/JPY edged up from 114.99 to 115.40 (+0.36%), GBP/JPY rallied from 135.64 to 135.86 (+0.16%), AUD/JPY is up from 77.63 to 77.75 (+0.15%), and NZD/JPY is up from 74.82 to 75.05 (+0.31%).

Watch Out For:

  • 11:50 pm GMT: Japanese capital spending q/y
  • 12:30 am GMT: Japanese manufacturing PMI (no revisions from 49.6 expected)
  • 1:00 am GMT: Chinese official manufacturing PMI (49.9 expected, 49.9 previous)
  • 1:00 am GMT: Chinese official non-manu PMI (53.9 previous)
  • 1:30 am GMT: Australian private capital expenditure q/q (-4.0% expected, -5.2% previous)
  • 1:30 am GMT: Australian retail sales (Check out Forex Gump’s guide here!)
  • 1:45 am GMT: Chinese Caixin manufacturing PMI (50.1 expected, 50.6 previous)

See also:

Asian Session Recap

London Session Recap

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