Article Highlights

  • Japanese core machinery orders up by 1.3% vs. 4.8% forecast
  • Japan’s PPI down from 2.6% to 1.9% y/y in Dec
  • Australian Dec employment change up by 37.4K vs. 5.3K estimate
  • Australia’s jobless rate down from 6.2% to 6.1% in Dec
  • Reserve Bank of India cut interest rates, Korean central bank slashed growth and inflation forecasts
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What a comeback! After yesterday’s nasty drop, the Australian dollar made a strong forex bounce in today’s Asian trading session, thanks to better than expected jobs data. The employment change report showed a 37.4K increase, much stronger than the estimated 5.3K increase, while the previous month’s reading was upgraded from 42.7K to 45.0K. With that, the jobless rate improved from 6.2% to 6.1% in December.

AUD/USD is up 0.49% so far and is 13 pips shy of the .8200 handle while AUD/JPY is enjoying a 0.75% gain. EUR/AUD is down 0.51%, GBP/AUD has a 0.46% loss, and AUD/NZD is up 0.53%.

Japan, on the other hand, showed weaker than expected economic data. Core machinery orders posted a mere 1.3% gain versus the projected 4.8% increase while the PPI slipped from 2.6% to 1.9% in December, due mostly to falling oil prices. With that, risk aversion set in the Asian financial markets, especially after the Reserve Bank of India surprised with a rate cut and the Korean central bank downgraded growth and inflation forecasts.

The forex calendar shows that it’s gonna be a data-light London trading session, with only the euro zone trade balance lined up at 11:00 am GMT. The trade surplus is slated to widen from 19.4 billion EUR to 21.3 billion EUR, which might be enough to provide the shared currency some support. Other than that, make sure you keep tabs on any updates that could affect risk sentiment in the next few hours. Be careful out there!

U.S. Session Recap

Bonnie and Clyde, peanut butter and jelly, Justin Bieber and his hair. Some things just go well together.

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