A lack of other major reports highlighted a strong report from New Zealand that boosted Kiwi across the board.
Meanwhile, the dollar continued to give up pips against its major counterparts as market players worried about the impact of Trump’s tariffs on both U.S. businesses and consumers.
- New Zealand’s building consents up by 0.2% vs. 9.5% dip in December
- Tokyo’s core CPI (y/y) improves from 0.7% to 0.9% in January
- Japan’s unemployment rate drops from 2.8% to 2.4% in January
- Australia’s HIA new home sales slips by 2.1% vs. 0.7% gain in December
New Zealand’s building consents
Data from New Zealand showed building approvals inching up by 0.2% in January as the increase in permits for apartments, townhouses, and new houses made up for declines in retirement unit applications.
The report doesn’t usually affect Kiwi’s price action for long, but Asian session traders took their chance to buy the New Zealand dollar after selling the comdoll for the past couple of days.
Japan’s unemployment rate surprise
Japan’s employment conditions saw a sharp decrease in unemployment rate in December.
A report printed earlier showed the jobless rate falling from 2.8% to 2.4% against expectations of the rate remaining at 2.8%. It’s the lowest rate since April 1993, yo!
Details tell us that the jobs-to-applicants ratio remained at 1.59 – the highest since January 1974 – and highlighted the shortage of workers for Japan’s companies amidst a declining population and recovering economy after five years of stimulus.
Meanwhile, a separate release showed consumer prices in Tokyo rising by 0.9% in January. The report, which is usually taken as a leading indicator, printed a bit better than the BOJ’s core CPI reading of 0.8% for December.
Trump’s steel and aluminium tariffs weigh on Asian bourses
The forex market might have struggled to find catalysts, but the Asian equities and commodities markets had no such trouble!
Investors continued to price in Trump’s recent policy changes where he’s slapping 25% tax on steel imports and a 10% tax on aluminum purchases.
Aside from its negative impact on U.S. steel buyers who will have to pass on their added costs to their consumers, market players worry that the move will prompt similarly aggressive changes from Uncle Sam’s major trading partners *cough* China *cough*.
- Nikkei fell by a whopping 2.77% to 21,121.8;
- Australia’s A SX 200 is down by 0.24% to 5,906.8;
- Hang Seng is down by 1.53% to 30,568.0, and
- Shanghai index is down by 0.32% to 3,263.176.
Even major commodities struggled with overall risk aversion.
- Gold is down by 0.01% to $1,316.83;
- Brent crude oil is down by 0.47% to $63.88, and
- U.S. WTI is down by 0.64% to $60.93.
Major Market Mover(s):
Whether it’s because of New Zealand’s positive report or a bit of profit-taking from previous losses, Kiwi found support across the board and ended up as the session’s biggest winner.
NZD/USD is up by 26 pips (+0.36%) to .7273;
AUD/NZD is down by 29 pips (-0.27%) to 1.0665;
NZD/CAD is up by 27 pips (+0.19%) to .9330;
GBP/NZD is down by 36 pips (-0.19%) to 1.8960, and
NZD/JPY is up by 12 pips (+0.15%) to 77.10.
With iron ore (which is used to make steel) and aluminum among Australia’s biggest exports, it’s no surprise that the Aussie a lot of hits today.
AUD/JPY is down by 16 pips (-0.19%) to 82.21;
EUR/AUD is up by 27 pips (+0.17%) to 1.5839;
AUD/CHF is down by 11 pips (-0.15%) to .7291, and
GBP/AUD is up by 23 pips (+0.13%) to 1.7779.
The Greenback continued to lose pips against its major counterparts as investors worried that (a) higher steel and aluminum tariffs will raise costs of steel-buying companies, which will then be passed on to consumers and that (b) Trump’s decision will prompt a trade war with China.
EUR/USD is up by 18 pips (+0.15%) to 1.2285;
USD/JPY is down by 22 pips (-0.21%) to 106.00;
USD/CHF is down by 16 pips (-0.17%) to .9400, and
GBP/USD is up by 14 pips (+0.10%) to 1.3789.
Watch Out For:
- Prime Minister Theresa May to give a speech in London
- 7:00 am GMT: Germany’s retail sales (0.8% expected, -1.9% previous)
- 7:00 am GMT: Germany’s import prices (0.4% expected, 0.3% previous)
- 8:00 am GMT: Spain’s unemployment change (-7.2K expected, 63.7K previous)
- 9:30 am GMT: U.K.’s construction PMI (50.5 expected, 50.2 previous)
- 10:00 am GMT: Euro Zone’s PPI (0.4% expected, 0.2% previous)
- 10:00 am GMT: BOE’s Mark Carney to give a speech in London