Article Highlights

  • Business NZ manufacturing index down from 55.1 to 54.4 in November
  • AU MI inflation expectations up from 3.2% to 3.4% in November
  • AU unemployment rate pops up from 5.6% to 5.7%
  • AU employment change up from 15.2K to 39.1K vs. 17.6K expected
  • Japan’s flash manufacturing PMI at 51.9 vs. 51.5 expected, 51.5 previous
  • China’s foreign direct investment (ytd/y) down from 4.2% to 3.9% in November
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The Greenback extended its post-FOMC rally during the Asian session before it eventually ran into a few sellers before the trading session ended.

Major Events:

Australia’s jobs reports – Employment data from the Land Down Under provided a bit of reprieve for the Reserve Bank of Australia (RBA).

For starters, the unemployment rate inched higher from 5.6% to 5.7% in November. However, the move is likely due to the labor force participation rate rising from 64.4% to 64.6%.

Details also reveal that a net of 39,100 workers had found jobs for the month, much higher than the expected 17,600 job growth. Not only that, but most of these new jobs are FULL TIME placements, which should be good for consumer spending. 39,300 full-time jobs were added while 200 part-time positions were shaved off.

Adding to the pretty picture is the underemployment rate –a measure of those who are employed but who would like to work more – dropping from a record high of 8.7% to 8.3% for the month, marking the lowest reading since August 2015.

But one swallow doesn’t make a summer. Around 107,000 part-time jobs have been added in the past 12 months, which left the 22,000 full-time jobs eating dust. This puts employment growth to 84,900, the lowest since October 2014. This underscores Australia’s problem with underemployment from transitioning from the mining boom. Market players will likely keep close tabs on the next economic releases to see if GDP will indeed rebound from its 0.5% dip in Q3 2016.

Post-FOMC party – Asian session market players caught up to their U.S. counterparts after the Fed raised its rates for the first (and only) time this year. What’s more the Fed is planning on not one, not two, but THREE more rate hikes in 2017.

Not surprisingly, the move boosted the dollar and the U.S. Treasury yields. However, it also weighed on Asian equities, as risk-takers now have more incentive to turn to U.S. bonds instead of putting their moolah on equities.

Australia’s A SX 200 is down by 0.82%, Hang Seng is down by a whopping 1.93%, and the Shanghai index is down by 0.75%. Nikkei, which cheered at more yen weakness, is up by 0.23%.

Major Market Movers:

USD – The dollar gained a few more pips at the start of the session, but soon encountered profit-takers before the session ended.

EUR/USD fell to a low of 1.0469 before finishing at 1.0514, while USD/CHF hit a high of 1.0258 before closing at 1.0224. USD/JPY also shot up to 117.85 before capping the session with a 99-pip gain (+0.85%) to 117.36.

AUD – The Australian dollar received a boost on the back of relatively strong employment numbers from the Land Down Under.

AUD/USD recovered to .7425 after dipping to .7384, AUD/JPY is up by 76 pips (+0.88%) to 87.13, and AUD/NZD is up by 48 pips (+0.46%) to 1.0450.

Watch Out For:

  • 7:45 am GMT: SECO economic forecasts
  • 9:00 am GMT: French flash manufacturing PMI (51.9 expected, 51.7 previous)
  • 9:00 am GMT: French flash services PMI (51.8 expected, 51.6 previous)
  • 9:30 am GMT: SNB monetary policy statement expected to retain -0.75% interest rate
  • 9:30 am GMT: German flash manufacturing PMI (54.6 expected, 54.3 previous)
  • 9:30 am GMT: German flash services PMI (55.0 expected, 55.1 previous)
  • 10:00 am GMT: Euro Zone flash manufacturing PMI (53.9 expected, 53.7 previous)
  • 10:00 am GMT: Euro Zone flash services PMI (53.9 expected, 53.8 previous)
  • 10:30 am GMT: U.K. retail sales (0.2% expected, 1.9% previous)

See also:

U.S. Session Recap
London Session Recap

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