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The Aussie and Kiwi initially shot higher on China’s strong trade data, but soon gave up most of their session gains when traders took a closer look at imports.

Meanwhile, the euro continued to inch higher against its rivals as Asian session traders caught up to their U.S. counterparts.

  • New Zealand’s building permits improve by 10.8% in November v. 10.4% dip in October
  • Japan’s bank lending (y/y) up by 2.5% vs. 2.7% expected and previous
  • Japan’s current account surplus dips to 1.70T JPY vs. 2.19T expected, 2.44T previous
  • China’s trade surplus jumps from 264B to 362B CNY in December
  • China’s dollar-denominated trade surplus widens from $40.2B to $54.7B vs. 36.9B expected
  • Japan’s Economy Watchers Sentiment dips from 55.1 to 53.9 in December
  • Major Events/Reports:

    China’s trade balance report

    A report from the world’s second largest economy showed a wider-than-expected trade surplus for the month of December.

    China’s surplus shot up to $54.69B, which is higher than the expected $36.9B figure and November’s $40.2B reading. That’s the largest surplus since January 2016, yo!

    This translates to a surplus of 362B in local currency, which is also higher than November’s 264B figure.

    A closer look tells us that stronger global demand had pushed exports to an annualized gain of 10.9%. Meanwhile, imports only increased by 4.5% when analysts had expected a 17.7% growth. What’s more, December’s imports also represent the weakest increase since December 2016.

    Another interesting tidbit is that China’s trade surplus clocked in at an all-time high of $275.81B for the month. Between this and rumors of China possibly halting U.S. Treasury purchases, any trade talks are bound to be rife with drama. Will the Donald have anything to say to this soon?

    Subdued equities trading

    With not a lot of fresh catalysts on the docket, Asian session traders mostly caught up to their U.S. counterparts or stayed in the sidelines altogether.

    • Nikkei slipped by 0.04% to 23,700.3;
    • Australia’s A SX 200 gained 0.10% to 6,063.5;
    • Hang Seng is up by 0.29%) to 31,211.3, and
    • Shanghai index is up by 0.10%) to 3,428.65.

    Commodity prices fared a bit better, however.

    Overall dollar weakness pushed gold prices 0.53% higher to $1,329.06 while Brent (+0.17 %) and U.S. crude (+0. 06%) oil prices also inched higher to $69.23 and $63.56 respectively.

    Major Market Mover(s):

    AUD and NZD

    Aussie and Kiwi both popped higher at China’s better-than-expected headline trade results, but soon turned lower when traders noticed that imports had actually gone down in December.

    AUD/USD shot up to .7905 before turning back to .7881;
    AUD/JPY rose to 87.87 before slipping to 87.69;
    NZD/USD hit .7277 before dropping to .7256, and
    NZD/JPY turned from 80.90 to close at 80.73.

    EUR

    The common currency continued to edge higher against its counterparts after the ECB’s latest meeting minutes hinted that Draghi and his team could be changing their tune on their easy monetary policies.

    EUR/USD is up by another 20 pips (+0.17%) to 1.2052;
    EUR/JPY is up by 22 pips (+0.16%) to 134.09;
    EUR/GBP is up by 9 pips (+0.10%) to .8895, and
    EUR/CHF is up by 14 pips (+0.12%) to 1.1755.

    Watch Out For:

    • 7:45 am GMT: France’s final CPI to remain at 0.3%?
    • 9:00 am GMT: Italy’s industrial production (0.6% expected, 0.5% previous)