With the FOMC statement now in the rear view mirror, Asian session forex traders were able to pay attention to today’s data releases.
- New Zealand’s Q1 2017 GDP up by 0.5% vs. 0.7% expected, 0.4% previous
- AU MI inflation expectations rises by 3.6% vs. 4.0% in May
- AU unemployment rate dips from 5.7% to 5.5% in May
- AU employment change shows 42.0K net increase vs. 9.7K expected, 46.1K previous
Cautious Asian session trading
Yen and gold prices spiked early in the Asian session after Washington Post published that Robert Mueller – former FBI Director and appointed head of a special counsel investigating Russia’s role in the 2016 Presidential election – is now examining whether Donald Trump has attempted to obstruct justice.
Five unnamed sources revealed that Daniel Coats, the current director of national intelligence, Mike Rogers, head of the National Security Agency, and Rogers’s recently departed deputy, Richard Ledgett, all agreed to be interviewed by Mueller’s investigators as early as this week.The line of inquiry marks a turning point in the investigation, which has been mostly focused on possible Russian interference and whether Trump’s people had talked to Putin’s people.
USD/JPY and other yen crosses soon recovered their losses, though, as the move lacked traction.
But the Trump probe, together with investors focusing more on Uncle Sam’s weak inflation and retail sales report than the Fed’s hawkishness, took their toll on risk appetite.
Nikkei was down by 0.42% by mid-session trading while the Shanghai index dipped by 0.11%. Ditto for Hang Seng (-1.07%) and Australia’s A SX 200 (-1.25%) which also saw losses.
New Zealand’s Q1 2017 GDP
New Zealand’s economy advanced by 0.5% in Q1 2017, which is faster than Q4 2016’s uptick but missed analyst expectations of a 0.7% growth. On an annualized basis, this translates to a 2.5% growth against the previous quarter’s 2.7% improvement.
Agriculture is still the biggest driver, this time rising by 4.3% – its fastest since September 2014 – thanks to higher milk production.
Manufacturing is also up by 1.0% while higher sales of motor vehicles and parts pushed retail trade and accommodation 1.8% higher.
Construction was the blight in the report, as it dipped 2.1% after expanding by 1.4% in Q4 2016. ALL of the building sectors declined, with non-residential building construction being the key driver.
Australia’s employment numbers
Unemployment in the Land Down Under dipped to 5.5% in May – the lowest since February 2013 – even though analysts had estimated another 5.7% reading.
A closer look tells us that employment showed a net increase of 42,000 (analysts had only expected a 9,700 increase) with 52,100 workers finding full-time employment while a net of 10,100 part-time employees lost their jobs. This is the eighth consecutive month that Australia printed net increases in full-time work.
Can’t blame labour force participation rate either, as it actually popped up to a 10-month high of 64.9% against last month’s 64.8% reading. Last but not the least is the monthly hours worked in all jobs, which showed a 1.87% increase to 31.1 million hours.
Major Market Mover(s):
Aussie bulls were fired up as soon as they saw the strength in both headline and underlying numbers in Australia’s latest jobs report.
AUD/USD is up by 23 pips (+0.30%) to .7616, AUD/JPY is up by 19 pips (+0.23%) to 83.44, and AUD/NZD is up by a whopping 97 pips (+0.93%) to 1.0547.
Kiwi bears came out to play after New Zealand’s GDP growth missed investors’ expectations.
NZD/USD is down by 45 pips (-0.62%) to .7221, NZD/JPY is down by 54 pips (-0.68%) to 79.12, and GBP/NZD is up by 108 pips (+0.62%) to 1.7654.
Watch Out For:
- 4:30 am GMT: SNB financial stability report
- 6:45 am GMT: French final CPI to maintain at 0.1%?
- 7:15 am GMT: Switzerland’s PPI (-0.1% expected, -0.2% previous)
- 7:30 am GMT: SNB’s LIBOR decision, policy assessment, press conference. Read Forex Gump’s trading guide!
- 7:40 am GMT: RBA’s Debelle to give a speech in Sydney
- 8:30 am GMT: U.K. retail sales report Read Forex Gump’s trading guide!
- 9:00 am GMT: Euro Zone’s trade balance (22.4B surplus expected, 23.1B previous)