Article Highlights

  • New Zealand’s visitor arrivals up by 2.2% vs. 3.9% growth in October
  • Japan’s core machinery orders up by 4.1% in October vs. 1.3% expected, -3.3% previous
  • Japan’s PPI (y/y) down by 2.2% as expected vs. -2.7% previous
  • U.K. Rightmove house price index down by 2.1% vs. 1.1% decline in October
  • Japan’s tertiary industry activity up by 0.2% vs. 0.3% expected, -0.3% previous
  • Japan’s preliminary machine tool orders down by 5.6% vs. 8.9% decline in October
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The Canadian dollar was the biggest mover of the Asian forex trading session, thanks to a weekend deal by non-OPEC members to cut their production.

Major Events:

Non-OPEC producers agree to cut production – Last Saturday Russia and 10 other non-OPEC oil producers have decided to cut their output by a total of 558,000 barrels a day to help ease the global supply gut. Russia is expected to shoulder the bulk, cutting 300,000 barrels a day.

The deal would represent the first non-OPEC agreement since 2001 and, taken together with the OPEC members’ own pledge to cut production by 1.2 million barrels a day, represents around 2% of the global oil supply.

Not surprisingly, oil prices soared at the news. Brent crude oil is up by a whopping 4.44% to $56.74 while U.S. crude oil prices also shot up by 4.87% to $54.01. Even the oil-related Canadian dollar saw sharp gains starting with weekend gaps in favor of the Loonie.

EUR recovery – The euro opened the week higher after sustaining heavy hits last week. There were no euro-specific catalysts during the Asian session, so profit-taking is not out of the question. If you recall, the European Central Bank (ECB) effectively extended its stimulus program even as some market players had expected the beginning of tapering from the central bank.

Higher-yielding currencies gain support – Higher-yielding currencies started the week strong after last weekend’s production cut deal among non-OPEC members pointed to higher inflation for their respective economies. For forex newbies out there, you should know that a faster inflation would be another incentive for the major central banks to raise their interest rates, which would make their currencies more attractive to yield hunters.

Major Market Movers:

CAD – The Canadian dollar gapped higher across the board thanks to a weekend deal among non-OPEC members to cut their oil production.

USD/CAD opened at 1.3145 after closing at 1.3167 and has finished the session at 23 pips lower (-0.18%) at 1.3122. Ditto for CAD/JPY, which gapped 30 pips higher and NZD/CAD, which gapped by 35 pips.

EUR – The common currency climbed across the board after taking heavy hits last week.

EUR/USD is up by 26 pips (+0.25%) to 1.00560, EUR/GBP shot up by 15 pips (+0.18%) to .8390, and EUR/CHF popped up by 14 pips (+0.13%) to 1.0746.

USD – The Greenback stepped back against its higher-yielding counterparts thanks to speculations of faster inflation for most economies.

USD/JPY inched 16 pips lower (-0.14%) to 115.28, NZD/USD is up by 15 pips (+0.21%) to .7144, and USD/CHF fell by 12 pips (-0.12%) to 1.0176.

Watch Out For:

  • No major report scheduled for the London session. Watch out for any volatility coming from pre-FOMC speculations!

See also:

Last Week’s Top Forex Movers

Bonnie and Clyde, peanut butter and jelly, Kanye West and Kanye West. Some things just go well together.

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Head on to Big Pippin’s Daily Chart Art for some pip-locking technical setups!