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The Aussie was king of pips thanks to a much stronger-than-expected data release. Meanwhile, the Asian bourses had a mixed day on different domestic pressures.

  • Japan prints 0.07T JPY trade surplus vs. 0.30T JPY deficit in May
  • Australia adds net 50,900 jobs vs. +16,700 expected, +13,400 previous
  • Australia’s unemployment rate remains at 5.4% in June
  • Australia’s NAB quarterly business confidence down to 7 from upwardly revised 8 in Q1
  • BOJ bought fewer JGBs at recent auction

Major Events/Reports:

Australia’s jobs release

The biggest story of the hour is net 50,900 Australian workers finding jobs in June. This is better than the 16,700 additions that analysts had expected and marks the strongest increase since November 2017.

A closer look showed even more strength with full-time workers rising by 41,200 while 9,700 part-time workers had found jobs.

In addition to that, labor force participation rate went up from 65.5% to 65.7% and clocked in its highest reading since February. And with the unemployment rate steadying at 5.4%, the numbers suggest that more workers had joined the job hunt (and found jobs) during the month.

The increase in full-time work and participation rate will be well-received by the Reserve Bank of Australia (RBA), which is worried that a slow wage growth is outpacing household debt increases.

Mini “tapering” from BOJ

The Bank of Japan (BOJ)’s debt-buying operation also turned some heads today.

The central bank only offered to buy 60B JPY worth of 25- to 40-year JGBs, down from 70B JPY at last week’s operation. It also trimmed its 10- to 25-year JGBs offers down from 190B JPY last week to 180B JPY today.

BOJ’s “tapering” has resulted to more volatility in the past, so today’s yen reaction is relatively muted. Maybe we’re getting used to the central bank’s adjustments?

PBoC sets yuan fix above 6.7 mark

The People’s Bank of China (PBoC) set its yuan mid-point fix to 6.7066, which is not only 152 pips (-0.23%) weaker than yesterday’s 6.6914, but also marks the first time it’s set above the psychological 6.7 figure. Heck, it’s the weakest setting since August 2017!

Word around the hood is that there was no effort from large, state-owned banks to defend the currency. The lack of intervention from the central (and major) banks suggested that everyone is fine with a little more depreciation down the road. Yipes!

Mixed market sentiment

The Asian bourses had a mixed day thanks to domestic pressures. Nikkei and ASX, for example, encountered profit-taking and bargain-hunting while the Chinese markets were mixed on an even weaker yuan.

  • Nikkei is down by 0.08% to 22,776.9
  • A SX 200 is up by 0.24% to 6,276.2
  • Hang Seng is up by 0.02% to 28,123.8
  • Shanghai index is down by 0.54% to 2,772.141

Gold bulls couldn’t get an in with the Greenback maintaining its strength, while crude oil prices took a step back after EIA reported further increases in the U.S. crude oil stocks.

It also didn’t help that “two sources familiar with the matter” told Reuters that OPEC and non-OPEC compliance with oil production quotas have declined from 147% in May to 120% in June.

  • Gold is down by 0.26% to $1,224.43
  • Brent crude oil is down by 0.41% to $72.74
  • U.S. WTI is down by 0.30% to $68.75

Major Market Mover(s):

AUD

The high-yielding Aussie soaked up the most pips after Australia printed a much better-than-expected jobs report.

AUD/NZD is up by 53 pips (+0.49%) to 1.0942; AUD/USD is up by 25 pips (+0.34%) to .7423; AUD/CAD is up by 35 pips (+0.36%) to .9774, and AUD/CHF is up by 24 pips (+0.33%) to .7415.

NZD

Fellow comdoll Kiwi didn’t get as much love, thanks in part to a strong move in AUD/NZD influencing other Kiwi pairs’ price action.

NZD/JPY is down by 19 pips (-0.25%) to 76.45; NZD/USD is down by 9 pips (-0.14%) to .6784; NZD/CAD is down by 12 pips (-0.13%) to .8933, and GBP/NZD is up by 42 pips (+0.22%) to 1.9277.

JPY

After taking hits for the past couple of days, yen bears took a chill pill and pushed the low-yielding currency higher. Then again, some yen traders might have also priced in the BOJ’s mini “tapering” earlier today.

USD/JPY is down by 14 pips (-0.12%) to 112.70; CAD/JPY is down by 9 pips (-0.11%) to 85.58; CHF/JPY is down by 12 pips (-0.11%) to 112.82, and GBP/JPY is down by 6 pips (-0.04%) to 147.39.

Watch Out For:

  • 6:00 am GMT: Switzerland’s trade balance (3.22B CHF expected, 2.76B CHF previous)
  • 8:30 am GMT: U.K.’s retail sales (0.1% expected, 1.3% previous)