Article Highlights

  • NZ building consents down by 9.2% vs. 2.0% uptick in October
  • NZ ANZ consumer confidence index up from -2.1% to 3.4% in January
  • AU MI inflation expectations grew by 4.3% vs. 3.4% gain in December
  • U.K. RICS house price balance down from 29% to 24% vs. 32% expected
  • AU unemployment rate pops up from 5.7% to 5.8%
  • AU employment change shows net gain of 13.5K vs. 10.2K gain expected, 37.1K uptick in November
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Forex price action was relatively subdued during the Asian session, as traders braced for today’s ECB policy decision and Trump’s inauguration tomorrow.

Major Events:

Australia’s employment report – The Australian Bureau of Statistics’ (ABS) latest release showed that a net of 13,500 workers had found jobs for the month, higher than the expected 10,200 gain but still a fraction of November’s 37,100 uptick.

The unemployment rate rising from 5.7% to 5.8% (the highest level since June!) gave Aussie bulls bad moments, but they eventually calmed down when they saw that labor force participation rate had also ticked higher from 64.6% to 64.7%.

Full-time employment had also increased by a net of 9,300 for the month, outpacing the 4,200 gain in part-time employment. As Forex Gump pointed in his trading guide, full-time jobs are preferable over part-time employment as they represent more stable income for potential consumers.

A net of 34,000 workers have found full-time employment over the year, which is tiny compared to the 125,500 workers who have found part-time work. This translates to a 0.4% gain in full-time jobs from a year earlier while part-time employment is up by 3.4%. Total employment has risen by 0.8% from a year earlier in December, up from the 0.7% uptick in November.

Mixed equities trading – The Asian bourses failed to trade in a single direction today thanks to country-specific factors.

Nikkei has benefited from Janet Yellen hinting at aggressive interest rate hikes as well as the dollar’s rally yesterday while Australia’s market was supported by a slightly stronger-than-expected employment report and uptick in gold prices.

China’s markets, on the other hand, took hits from low liquidity and profit-taking ahead of the Lunar New Year holidays. The PBoC injected another 100B CNY through 7-day reverse repos and 150B CNY through 28-day reverse repos to boost liquidity ahead of the holidays.

Nikkei is up by 0.92% and Australia’s A SX 200 is up by 0.24% while Hang Seng is down by 0.36% and the Shanghai index is down by 0.22%.

Major Market Movers:

AUD – The Aussie was dragged lower when Australia printed its jobless rate, but soon recovered as traders digested the not-so-terrible details and risk appetite picked up.

AUD/USD slipped to .7494 before shooting back up to .7521 and GBP/AUD hiked to 1.6357 before slipping back down to 1.6326 while AUD/JPY straight up rose by 55 pips (+0.64%) to 86.20 and AUD/NZD shot up by 20 pips (+0.19%) to 1.0533.

USD – The Greenback gained a couple more pips against its major counterparts thanks to Janet Yellen hinting at aggressive rate hikes in the year ahead.

EUR/USD slipped by 33 pips (-0.31%) to 1.0638, USD/JPY rocketed 101 pips (+0.89%) higher to 114.61, GBP/USD fell by 12 pips (-0.10%) to 1.2278, and USD/CHF popped up by 33 pips (+0.33%) to 1.0070.

Watch Out For:

  • 9:15 am GMT: Switzerland’s PPI (0.2% expected, 0.1% previous)
  • 10:00 am GMT: Euro Zone current account (29.3B EUR expected, 28.4B EUR previous)
  • 1:45 pm GMT: ECB’s monetary policy decision

See also:

U.S. Session Recap
London Session Recap

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