Article Highlights

  • China’s markets out on Spring Festival holiday
  • New Zealand trade balance shows 41M NZD deficit vs. 95M shortfall expected
  • Japan’s retail sales up by 0.6% vs. 1.6% uptick expected, 1.7% previous
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Asian bourses started the week on the wrong side of the charts, as Asian session forex traders caught up to last Friday’s U.S. GDP report and Trump’s latest immigration-related orders.

Major Events:

Japan’s retail sales – Retail sales in Japan inched 0.6% higher from a year earlier in December, a second month in a row, after rising by 1.7% in November. Analysts had expected a 1.3% uptick.

A closer look tells us that sales for food (1.9% to 1.7%), medicine and toiletry stores (3.0% to 0.2%), and motor vehicles (6.3% to 5.9%) took the most hits. On a monthly basis, retail sales have fallen down by 1.70% from November to December.

The latest figures underscore concerns that the BOJ won’t be pulling in its punches amidst improving inflation figures. Until wage growth sees improvement, consumers in Japan will likely tighten their purse strings instead of spending it even as prices of consumer goods and services rise.

Dollar selloff – With not a lot of data on the docket, Asian session forex traders decided to play catch up to last week’s events. If you recall, Uncle Sam printed a weaker-than-expected GDP report on Friday.

It also didn’t help that Trump issued another set of executive orders, this time temporarily banning refugees from Syria and imposing a 90-day ban on citizens from Iran, Iraq, Libya, Somalia, Sudan, Syria and Yemen. The move sparked fears that Trump will also follow through with his protectionist stance during the campaign period.

The Shanghai index and Hang Seng are closed for the holidays today, but Australia’s A SX 200 is down by 0.81% while Nikkei, which also shouldered Japan’s less-stellar-than-expected retail sales data, is also down by 0.56%.

Major Market Movers:

USD – The Greenback opened with weekend gaps against most of its major counterparts, as Asian session forex traders priced in Trump’s new immigration policies signed last Friday.

EUR/USD gapped 23 pips higher before ending the session with a 12-pip gain (+0.11%) to 1.0732, USD/JPY slipped by 27 pips before closing the session 36 pips (-0.31%) lower at 114.41, and GBP/USD showed a 26-pip gap before capping the session at 1.2580.

Watch Out For:

  • 9:00 am GMT: KOF economic barometer (102.9 expected, 102.2 previous)
  • 9:00 am GMT: Spanish flash GDP (q/q) expected to remain at 0.7%

See also:

Last Week’s Top Forex Movers

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