- NZ business manufacturing index: 56.7 vs. 54.9 previous
- NA ANZ consumer confidence up from -3.3% to 2.3%
- AU MI inflation expectations down from 4.0% to 3.6%
- AU HIA new home sales: -2.7% vs. -3.0% last month
- U.K. RICS house price balance up from 49 to 50
- Japan all industries activity down from 1.0 to -1.0 vs. -0.8 expected
- PBoC injects 400B yuan into the markets
It was a topsy-turvy day for Asian session forex traders, as risk appetite petered out and encouraged intraday reversals.
Oil takes a (short) breather– The commodity took a short breather from its weekly losses today as WTI rebounded from below $27 and Brent crept higher to $28.62. The gains were temporary, however, as market players soon focused on prevailing worries as well as a report by the American Petroleum Institute (API) showing that crude oil inventories rose well above their expectations in the week to January 15.
PBoC injects moolah – Aside from keeping the USD/CNY fix stable for the 10th day in a row, the People’s Bank of China (PBoC) also injected 400B yuan worth of liquidity in the markets, the most it has done so in three years. 290B yuan would come from the 28-day reverse repos while 110B yuan will come from the 7-day reverse repos. Not exactly surprising to loosen the markets considering the Golden Week holidays are up ahead.
More easing from the BOJ? – The yen had its own roller coaster ride today thanks to one of Japanese PM Shinzo Abe’s “close aides.” Masahiko Shibayama, aide to Abe, stated that the BOJ should step up its easing and that current conditions are in place for it. Fortunately for yen bulls, Kuroda essentially contradicted the statement when he projected optimism over the economy in his speech in Parliament today.
Major Currency Movers:
JPY – The low-yielding currency etched V-patterns across the board, reflecting the comeback of risk aversion some time in the middle of the session.
USD/JPY popped up by 65 pips (+0.56%) to 117.41 before settling to 117.00 while EUR/JPY also rose by 42 pips (+0.33%) before edging to 127.42. Ditto for GBP/JPY, which shot up to 166.79 before settling to 165.82 and AUD/JPY rising to 81.63 before capping the session at 80.80.
CAD – Thanks to a reversal in oil’s mini rallies, the Loonie also reflected reversals against its major counterparts.
USD/CAD fell to 1.4450 before closing at 1.4493 while CAD/JPY popped up to 81.28 before closing at 80.73.
- World Economic Forum still ongoing
- 12:45 pm GMT: ECB interest rate decision. Read all about what you should expect from the central bank today!
Bonnie and Clyde, peanut butter and jelly, Kanye West and Kanye West. Some things just go well together.
Head on to Big Pippin’s Daily Chart Art for some pip-locking technical setups!