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Asian session forex traders didn’t have a lot of news reports to work with, so they mostly focused on extending the previous session’s themes.

The pound continued to gain on speculations that Britain might have reached a deal with EU officials, while the yen stumbled a bit on the back of North Korea’s latest ICBM launch.

  • Japan’s retail sales (y/y) down by 0.2% vs. 0.1% gain expected, 2.3% growth in September
  • U.K.’s BRC shop price index (y/y) slips by 0.1% for another month in November
  • Bitcoin officially breaches $10,000 mark
  • RBNZ’s Grant Spencer: Change in loan restrictions to have “negligible effect” on OCR track
  • Spencer: collapse of house prices not “a particularly high risk”

Major Events/Reports:

RBNZ loosens lending restrictions

Earlier today acting Reserve Bank of New Zealand (RBNZ) Governor Grant Spencer announced the central bank’s plans to ease lending restrictions on the level of new bank lending to owner-occupiers with less than 20 per cent deposit and leveraged residential property investors.

Specifically, RBNZ would undertake a “modest easing” of loan-to-value ratio (LVR) restrictions starting January 1, 2018 after tightening them back in October 2016.

Remember that house prices have risen more than 50% nationally in the past decade (almost doubled in Auckland!) but has since chilled as a slowing economy and lending restrictions curbed demand.

Spencer was quick to play down the move, however, saying that the “incremental change” will have a “negligible effect on the sort of hypothetical OCR track.”

He also shared that RBNZ hasn’t set a schedule for removing ALL the LVR and that they will look for more stability for house prices before totally scrapping them.

Kiwi traders mostly shrugged off the move, as the “incremental” change is also expected to be offset by the government’s decision to ban foreign purchases of existing homes starting early 2018.

Bitcoin breaches $10,000 mark

With not a lot of fresh data on the docket, forex traders mostly talked about Bitcoin hitting the closely-watched $10,000 mark.

The move was nothing short of incredible considering that it dipped to a low of around $6,000 TWO WEEKS AGO. Are we looking at a bubble or the start of another leg higher?

Overall risk appetite

The Asian bourses were mostly in the green today as they took cues from their U.S. counterparts. If you recall, incoming Fed Chairman Jerome Powell communicating his bias against more bank regulations was received enthusiastically.

Of course, it also didn’t hurt that Uncle Sam printed a bunch of positive economic data including notable highs for consumer sentiment.

Nikkei gained another 0.37% to 22,569.00 and Australia’s A SX 200 shot up by 0.44% to 6,010.30, but concerns over the government’s efforts to limit riskier forms of financing continued to weigh on Chinese bourses. Hang Seng slipped by 0.31% to 29,587.50 while China’s A50 dipped by 0.75% to 13,142.70.

Major Market Mover(s):

Comdolls

Kiwi bulls didn’t buy that loosening lending restrictions would boost housing (and other) prices, so Kiwi took a step back against its counterparts.

Meanwhile, the Aussie’s high-yielding status took hits when U.S. bond yields crept higher and tightened its gap against Australia’s bond yields.

AUD/USD is down by 14 pips (-0.18%) to .7583 and
NZD/USD is down by 21 pips (-0.30%) to .6890.

JPY

North Korea’s latest ICBM launch spooked traders in early Asian session trading, but yen bulls soon stepped in to erase most of its losses.

USD/JPY shot up to 111.67 before slipping to 111.45;
CHF/JPY hit 113.44 before dropping back to 113.25;
AUD/JPY jumped to 84.91 before settling down to 84.51, and
EUR/JPY reached 132.30 before chillin’ at 132.12.

GBP

The pound continued to gain against its major counterparts as traders continued to be optimistic over Britain’s Brexit deal prospects.

GBP/USD is up by 22 pips (+0.17%) to 1.3361;
GBP/JPY is up by 19 pips (+0.13%) to 148.91, and
GBP/CHF is up by 22 pips (+0.17%) to 1.3150.

Watch Out For:

  • 7:00 am GMT: Switzerland’s UBS consumption indicator
  • 7:45 am GMT: France’s GDP (q/q) to remain at 0.5%?
  • 7:45 am GMT: France’s consumer spending (y/y) (1.4% expected, 2.8% previous)
  • 9:30 am GMT: U.K.’s mortgage approvals (65.0K expected, 66.2K previous)
  • 9:30 am GMT: U.K.’s individual lending
  • 10:00 am GMT: Euro Zone’s consumer confidence to remain at 0.1?
  • 10:00 am GMT: Euro Zone’s economic confidence (114.6 expected, 114.0 previous)
  • 10:00 am GMT: Euro Zone’s industrial sentiment (8.6 expected, 7.9 previous)
  • 10:00 am GMT: Euro Zone’s business climate (1.51 expected, 1.44 previous)