- AU home loans drops by 0.5% vs. 0.1% uptick expected, 0.4% previous
- Japan’s current account balance shows 2.21T JPY surplus vs. 1.78T expected, 1.26T previous
- Japan’s Economy Watchers sentiment dips from 48.6 to 47.4 in March
- A U.S. Navy strike group is headed to the Korean Peninsula
Forex price action was a mixed bag of nuts, as Asian session traders caught the dollar-buying bug before they calmed down and traded with improved risk appetite.
Geopolitical concerns – Over the weekend, news came out that the U.S. is sending a Navy strike group towards the Korean Peninsula. This comes after Trump has met with China’s Xi Jinping AND ordered a missile strike into Syria late last week.
A U.S. Navy strike group led by the USS Carl Vinson aircraft carrier is on its way to the western Pacific Ocean near the Korean peninsula. Dave Benham, a spokesman for the Pacific Command, said that “The U.S. Pacific Command ordered the Carl Vinson Strike Group north as a prudent measure to maintain readiness and presence in the Western Pacific.”
Apparently, North Korea is a military risk so close to the 105th birthday of its founding president, Kim Il Sung on April 15. Word around the hood is that Pyongyang might use the opportunity to showcase its “tremendous military muscle with a nuclear force” during the event.
The news caused jitters in the Asian bourses at the start of the session before profit-taking and cooler heads prevailed to push most of the higher-yielding assets into retracements or intraday reversals.
Dollar domination – A not-so-dovish-NFP report from Uncle Sam and FOMC voting member Dudley saying that rebalancing the Fed’s balance sheet would only prompt a “little pause” in its rate hike plans continued to boost the Greenback higher across the board at the start of the session.
Non-voting FOMC member James Bullard could’ve rained on the bulls’ parade with his remarks at an event in Australia, but his statements about the U.S. being in a low-growth, low-productivity environment and requiring no rush to raise rates was mostly shrugged off by market players.
USD – The scrilla continued to flex its muscles against its major counterparts following a relatively okay NFP release and talks of the Fed’s balance sheet plans not hampering its rate hike schedule.
EUR/USD fell to a low of 1.0570 before recovering to 1.0586 and popped up to a high of 1.0105 before slipping back down to 1.0094 while USD/JPY straight up gained another 39 pips (+0.35%) to 111.44.
Even the comdolls had no game against the Greenback. AUD/USD is 7 pips down (-0.09%) to .7489, USD/CAD is up by 17 pips (+0.13%) to 1.3418, and NZD/USD dropped to .6918 before popping back up to .6934.
Watch Out For:
- 8:00 am GMT: Italian industrial production (0.4% expected, -2.3% previous)
- 8:30 am GMT: Euro Zone Sentix investor confidence (20.1 expected, 20.7 previous)