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Risk-taking was the name of the game during the Asian session. Kiwi missed the memo, however, and dropped sharply against its major counterparts.

Meanwhile, the yen shrugged off Japan’s CPI report and traded a tad lower across the board as traders bought its higher-yielding counterparts.

  • New Zealand’s retail sales up by 1.7% vs. 1.4% in Q4
  • New Zealand’s core retail sales up by 1.8% vs. 0.8% in Q4
  • Japan’s headline CPI up by 1.4% vs. 1.0% growth expected and 1.3% uptick in December
  • Japan’s core CPI maintains 0.9% uptick vs. 0.8% expected in January

Major Events/Reports:

New Zealand’s retail sales

A report from Statistics New Zealand showed retail sales rising by 1.7% in the last three months of 2017, which is faster than Q3’s 0.3% growth and the expected 1.4% uptick.

Meanwhile, the core reading printed at 1.8%, also higher than the expected 0.7% increase and Q3’s 0.6% growth. This helped push annualized retail sales growth faster from 4.6% in Q3 to 5.4% in Q4.

Details reveal that the strong performance mostly came from supermarket and grocery stores (+1.4%), specialized food (+5.8%), and motor vehicles and parts (+2.1%).

Japan’s inflation report

Data from the world’s third largest economy revealed consumer prices rising by 1.4% from a year earlier in January.

A closer look tells us that the nationwide CPI– which excludes volatile fresh food costs but includes oil prices – shot up by 0.9%, the highest since March 2015.

Market players mostly ignored the CPI report, however, likely because the price increase was mostly driven by higher food costs.

Unlike in previous releases, Tokyo’s core CPI report did not come with the release. Instead, it’s scheduled on Thursday next week.

Overall risk appetite

Whether it’s profit-taking or optimism over lower U.S. Treasury yields, the Asian bourses and major commodities traded higher during the session.

  • Nikkei is up by 0.51% to 21,847.9;
  • Australia’s A SX 200 is up by 0.23% to 5,986.5;
  • Shanghai index is up by 0.09% to 3,271.647, and
  • Hang Seng is up by 0.84% to 31,226.6.

A surprise draw in EIA’s crude oil stockpiles report also helped boost oil prices:

  • Brent crude oil is up by 0.12% to $66.31 and
  • U.S. WTI is up by 0.18% to $63.73.

Major Market Mover(s):

NZD

Kiwi was the biggest loser of the session even as New Zealand printed a strong retail sales report. There was no catalyst for the move, though analysts pointed to overall Greenback strength and speculations that the report won’t change the RBNZ’s cautious stance as reasons for the selloff.

GBP/NZD is up by 111 pip s(+0.58%) to 1.9115;
NZD/USD is down by 40 pips (-0.54%) to .7299;
NZD/JPY is down by 31 pips (-0.40%) to 78.02, and
AUD/NZD is up by 40 pips (+0.37%) to 1.0723.

USD

The dollar continued to gain support after a decrease in U.S. bond yields calmed investors and encouraged profit-taking from previous market moves (read: dollar selloff).

EUR/USD is down by 24 pips (-0.19%) to 1.2306;
USD/JPY is up by 15 pips (+0.14%) to 106.89;
USD/CHF is up by 16 pips (+0.19%) to .9345, and
USS/CAD is up by 14 pips (+0.11%) to 1.2718.

AUD

There was no catalyst for the Aussie’s losses, but it could have been dragged by its fellow comdoll Kiwi.

AUD/USD is down by 18 pips (-0.23%) to .7827;
GBP/AUD is up by 44 pips (+0.25%) to 1.7825, and
AUD/CAD is up by 12 pips (+0.12%) to .9954.

Watch Out For:

  • 7:00 am GMT: Germany’s final GDP (q/q) to remain at 0.6%?
  • 10:00 am GMT: Euro Zone’s final CPI also expected to maintain at 1.3%
  • 10:00 am GMT: No changes expected from Euro Zone’s 1.0% final core CPI