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The dollar’s price action was as exciting as watching paint dry, as a lack of catalysts kept traders on the sidelines. Can’t say the same for the yen, however, as it took hits on overall risk appetite.

  • AU new motor vehicle sales jumps by 4.5% vs. 0.2% in November
  • Japan’s PPI (m/m) up by 0.2% vs. 0.4% expected, 0.5% previous
  • Japan’s PPI (y/y) up by 3.1% vs. 3.2% growth expected, 3.5% previous
  • Japan’s tertiary industry activity up by 1.1% vs. 0.4% expected, 0.2% previous

Major Events/Reports:

Lower-tier economic releases

There were no major reports released today, so day traders had to make do with mid-tier data releases.

First up is Australia’s new motor vehicle sales, which printed a strong 4.5% increase in December against the 0.2% uptick in November.

A weekly consumer confidence report also jumped to its four-year highs in the first week of 2018 thanks in part to seasonality (they must have had fun New Year celebrations!).

And then there’s Japan’s PPI report, which dipped from 3.5% to 3.1% in December. On a monthly basis, factory gate prices had climbed by 0.2% when analysts had expected a 0.4% improvement.

Overall risk appetite

Anticipation of hawkish central bank policies and a weaker dollar buoyed risk sentiment during the Asian session.

Nikkei, which priced in a strong earnings season and a retracement on USD/JPY, shot up by 0.75% to 23,892.3. Australia’s A SX 200 missed the bus with a 0.05% loss to 6,050.5 while Hang Seng is up by 1.32% to 31751.6 and the Shanghai index is up by 0.30% to 3,420.798.

Commodity prices were a little more mixed.

  • Gold is up by 0.12% to $1,341.20 on overall dollar weakness, while
  • Brent crude oil is down by 0.34% to $69.97 and
  • U.S. WTI is up down by 0.49% to $64.47.

Major Market Mover(s):

JPY

The low-yielding yen was dragged by a triple threat of weak Japanese PPI, profit-taking from yesterday’s gains, and overall risk appetite.

USD/JPY climbed 50 pips (+0.45%) to 110.95;
EUR/JPY shot up by 48 pips (+0.35%) to 136.00;
GBP/JPY is up by 58 pips (+0.38%) to 152.95, and
AUD/JPY is up by 33 pips (+0.38%) to 88.34.

Watch Out For:

  • 7:00 am GMT: Germany’s final CPI to remain at 0.6%?
  • 7:45 am GMT: France’s government budget balance
  • 9:30 am GMT: U.K.’s headline inflation (y/y) (3.0% expected, 3.1% previous)
  • 9:30 am GMT: U.K.’s core CPI (y/y) (2.6% expected, 2.7% previous)
  • 9:30 am GMT: U.K.’s PPI input (0.5% expected, 1.8% previous)
  • 9:30 am GMT: U.K.’s PPI output (0.2% expected, 0.3% previous)
  • 9:30 am GMT: U.K.’s PPI output (0.2% expected, 0.3% previous)