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The lack of fresh catalysts didn’t stop the Aussie, Loonie, and the Greenback from snagging pips across the board.

  • Japan’s BSI manufacturing index down from 1.1 to -2.9 in Q2 2017
  • Australia’s NAB business confidence down from 13 to 7 in May
  • Australia’s NAB business conditions down from 14 to 12
  • French final non-farm payrolls (q/q) revised higher from 0.3% to 0.4%

Major Events/Reports

Australia’s business surveys

With not a lot of data on the docket, Asian session traders gave attention to Australia’s business surveys for the month of May.

National Australia Bank’s business conditions survey clocked in at 12 from April’s 14 reading while business confidence slipped from 13 to 7.

Despite that, the NAB still believes that the surveys pointed to an “upbeat business sector” as the surveys remain “at very elevated levels while solid trends across most states and industries are encouraging.”

The NAB’s concern is concentrated on the gap between business and household conditions, which it says is “critical to the outlook for growth.” For now, the NAB expects growth to accelerate in H2 2017 following weather disruptions in the first half of the year.

Improved risk sentiment

Asian equities fared a bit better than their U.S. counterparts as optimism ahead of the FOMC meeting blunted the impact of lower tech indices performance in the U.S.

  • Australia’s markets, which came back from a holiday, is up by 1.35% to 5,754.70,
  • The Shanghai index is up by 0.24% to 3,147.44;
  • Hang Seng is up by 0.46% to 25,826.00, and
  • Nikkei is up by 0.09% to 19,926.50

Saudi to cut oil exports to Asia, U.S.

The Black Crack edged higher today after a Reuters report hinted that Saudi Arabia is walking the talk by planning less crude allocations to some of its buyers.

Citing unnamed sources, Reuters revealed that Saudi is planning to further reduce its crude allocations in Asia by another 300,000 barrels per day (bpd).

Apparently, state-owned oil firm Aramco is planning to cut supplies to India by about 200,000 bpd and China by around 110,000 bpd. Two sources also hinted that allocations to the U.S. would be “lowered significantly,” while volumes going to Europe would also be lowered further.

Unconfirmed or not, the news did the trick for oil prices. Brent crude oil is up by 0.27% to $48.42 while U.S. crude oil prices is up by 0.26% to $46.20.

Major Market Mover(s):

AUD

The Aussie took advantage of overall risk appetite and relatively upbeat business surveys from Australia.

AUD/USD is up by 12 pips (+0.16%) to .7557 after hitting a high of .7565, AUD/JPY is up by 22 pips (+0.27%) to 83.11, and EUR/AUD dropped by 44 pips (-0.30%) to 1.4808.

CAD

Loonie bulls extended their party in the streets as news about Saudi cutting its supply got piled on top of a hawkish word or two from a BOC official during the U.S. session.

USD/CAD slipped by another 43 pips (-0.32%) to 1.3290, CAD/JPY jumped by 34 pips (+0.41%) to 82.75, and GBP/CAD fell by 62 pips (-0.37%) to 1.6813.

USD

Anticipation ahead of the FOMC statement pushed the Greenback higher during the session.

EUR/USD slipped by 13 pips (-0.12%) to 1.1191, USD/JPY popped up by 12 pips (+0.11%) to 109.98, and USD/CHF inched 10 pips higher (+0.10%) to .9697.

Watch Out For:

  • 6:00 am GMT: German wholesale price index (0.2% expected, 0.3% previous)
  • 8:30 am GMT: U.K. CPI report (read Forex Gump’s trading guide here!)
  • 8:30 am GMT: U.K. core CPI (y/y) (2.3% expected, 2.4% previous)
  • 8:30 am GMT: U.K. PPI input (-0.5% expected, 0.1% previous)
  • 8:30 am GMT: U.K. PPI output (0.2% expected, 0.4% previous)
  • 8:30 am GMT: U.K. RPI (y/y) to remain at 3.5%?
  • 8:30 am GMT: U.K. house price index (y/y) (3.7% expected, 4.1% previous)
  • 9:00 am GMT: German ZEW economic sentiment (21.6 expected, 20.6 previous)
  • 9:00 am GMT: Euro Zone ZEW economic sentiment (37.2 expected, 35.1 previous)