With not a lot of major data out for release, Asian session forex traders mostly stayed in the sidelines. The comdolls saw some action, though, thanks to fresh sanctions on North Korea and a business report form Australia.
- AU NAB business confidence dips from 12 to 5 in August
- UN Security Council agrees to impose new sanctions on North Korea
Australia’s business survey results
There weren’t a lot of other major news reports on tap, so Aussie bulls and bears were all eyes on National Australia Bank’s (NAB) business survey for the August month. And unfortunately, the reports saw mixed results at best.
Business conditions continued its solid run by another point to hit +15 index points. This is not only higher than the long-run average of +5 but also marks the highest reading since early 2008. Wowza!
A closer look tells us that there was also a notable jump for the employment component for August. This is good news for the RBA, which has been seeing green shoots for the labour market lately. Trading and profitability also eased for the report, but remain at high levels.
Unfortunately, business confidence isn’t as rosy. It dropped 7 points to +5 for the month, which marks the first time the index has fallen below its long-run average since mid-2016.
When NAB asked responders what their biggest concerns are, they replied that “demand, margins, government policy and costs (energy and wages) play a major role” in their concerns.
Fresh sanctions on North Korea
Earlier today the United Nations Security Council unanimously voted to impose fresh sanctions on North Korea after the Republic carried out its sixth and largest nuclear test in late August. This marks the ninth sanction adopted by the 15-member council since 2006.
CNN, citing “U.S. official familiar with negotiations,” shared that the resolution is designed to accomplish six major goals: cap North Korea’s oil imports; ban textile exports; end additional overseas laborer contracts; suppress smuggling efforts, and stop joint ventures with other nations and sanction designated North Korean government entities.
You can read more about the deets of the sanctions here. Asian session traders have yet to fully react to the fresh news, but it probably won’t take long before North Korea responds after it warned that the U.S. will pay its “due price” for the sanctions.
Overall risk appetite
Major currencies (except for AUD and NZD) were on tight ranges for most of the session, but that didn’t stop the Asian bourses from extending the previous sessions’ risk-friendly vibe.
- Nikkei is up by 0.99% to 19,739.50;
- Australia’s A SX 200 is up by 0.72% to 5,754.40;
- Hang Seng is down by -0.02% to 27,949.00, and
- Shanghai index is up by 0.09% to 11,969.65.
Major Market Mover(s):
The Aussie had its bad moments after Australia’s weaker-than-expected business confidence report is released, but it soon regained its mojo thanks to overall risk appetite.
AUD/USD dipped to a low of .7998 before rising to .8009;
AUD/JPY fell to 87.49 before recovering to 87.58;
GBP/AUD jumped to 1.6468 before settling to 1.6453, and
AUD/NZD dropped to 1.1040 before popping back up to 1.1080.
Watch Out For:
- 5:30 am GMT: France’s final private payrolls (q/q) to remain at 0.5%?
- 8:00 am GMT: Italy’s quarterly unemployment rate (11.3% expected, 11.6% previous)
- 8:30 am GMT: U.K.’s inflation numbers. Read Forex Gump’s trading guide for tips!
- 8:30 am GMT: U.K. PPI output to remain at 0.2%?
- 8:30 am GMT: U.K. PPI input (y/y) (3.1% expected, 3.2% previous)