11 Dec 2014
Asia Recap: Stellar performance by the Kiwi
FXStreet (Bali) - It has been a lively Asian session all around, with the Kiwi the top performer, while the US Dollar remains weaker across the board as the squeeze continues ahead of next week's FOMC, and the most imminent US retail sales report later today.
AUD/USD chewed through offers all the way up to 0.8373 (just about where we peaked on Dec 9th) following an improved Aus jobs report, with the 43.5k total change increase almost entirely attributable to part-time job creation; a further inspection into the report suggests a softening labour market though. From the highs of the day we traveled back down to 0.8330 or thereabouts, where the rate settled awaiting fresh flows from European traders.
NZD/USD was the main protagonist in Asia, after a more explicit tightening bias was provided by the RBNZ, surprising the market, which had expected a more dovish outcome. The statement noted “some further increase in the OCR is expected to be required at a later stage", a phrase that had been removed from the press release in October. The warning towards a high NZD was reiterated, with little implications for the rate though. RBNZ noted: “The exchange rate does not reflect the decline in export prices this year and remains unjustifiably and unsustainably high. We expect to see a further significant depreciation.” NZD/USD traded as high as 0.7870 before seeking liquidity back down towards 0.78.
USD/JPY continued to be sold ahead of Tokyo, with bouts of risk aversion giving a hard time to those bottom-pickers out there. The rate found its lowest in 2 weeks at 117.35 before Tokyo came online buying the pair in earnest, re-claiming the 118.00, with the daily kijun line acting as a technical reference to stop the bleeding. While the USD/JPY uptrend is still unambiguously in place, resetting longs remains a dangerous proposition - certainly not for the faint-hearted given recent volatility -, and with "E-commerce dealers at the major banks reporting sharply reduced liquidity meaning more volatility in a heavily-positioned USD/JPY market", Sean Lee, Founder at FXWW notes, chances of a further unwinding of positions ahead of year-end should not be ruled out.
Key headlines
RBNZ maintains OCR at 3.5% and expects more gradual rise in interest rate
RBNZ reinforces its explicit tightening bias - Westpac
China's subdued inflation leaves room for policy easing - Nomura
BoC Poloz: New normal for Canada rates lower that in the past
RBNZ: No further hikes until Dec 2015 - ANZ
Australian jobs beat estimates, part-time driven
South Korea BoK Interest Rate Decision unchanged at 2% in December
Talk of rate cuts in NZ misguided - BNZ
Australia: Breakdown of details highlights soft labour market - Westpac
Australia Consumer Inflation Expectation: 3.4% (December)
Japan Tertiary Industry Index (MoM) below forecasts (-0.1%) in October: Actual (-0.2%)
Japan Foreign investment in Japan stocks rose from previous ¥-53B to ¥481.9B in December 5
Japan Machinery Orders (YoY) below expectations (-0.3%) in October: Actual (-4.9%)
Japan Foreign bond investment fell from previous ¥3.4B to ¥-852.2B in December 5
Japan Machinery Orders (MoM) came in at -6.4% below forecasts (-2.4%) in October
United Kingdom RICS Housing Price Balance below forecasts (17%) in November: Actual (13%)
AUD/USD chewed through offers all the way up to 0.8373 (just about where we peaked on Dec 9th) following an improved Aus jobs report, with the 43.5k total change increase almost entirely attributable to part-time job creation; a further inspection into the report suggests a softening labour market though. From the highs of the day we traveled back down to 0.8330 or thereabouts, where the rate settled awaiting fresh flows from European traders.
NZD/USD was the main protagonist in Asia, after a more explicit tightening bias was provided by the RBNZ, surprising the market, which had expected a more dovish outcome. The statement noted “some further increase in the OCR is expected to be required at a later stage", a phrase that had been removed from the press release in October. The warning towards a high NZD was reiterated, with little implications for the rate though. RBNZ noted: “The exchange rate does not reflect the decline in export prices this year and remains unjustifiably and unsustainably high. We expect to see a further significant depreciation.” NZD/USD traded as high as 0.7870 before seeking liquidity back down towards 0.78.
USD/JPY continued to be sold ahead of Tokyo, with bouts of risk aversion giving a hard time to those bottom-pickers out there. The rate found its lowest in 2 weeks at 117.35 before Tokyo came online buying the pair in earnest, re-claiming the 118.00, with the daily kijun line acting as a technical reference to stop the bleeding. While the USD/JPY uptrend is still unambiguously in place, resetting longs remains a dangerous proposition - certainly not for the faint-hearted given recent volatility -, and with "E-commerce dealers at the major banks reporting sharply reduced liquidity meaning more volatility in a heavily-positioned USD/JPY market", Sean Lee, Founder at FXWW notes, chances of a further unwinding of positions ahead of year-end should not be ruled out.
Key headlines
RBNZ maintains OCR at 3.5% and expects more gradual rise in interest rate
RBNZ reinforces its explicit tightening bias - Westpac
China's subdued inflation leaves room for policy easing - Nomura
BoC Poloz: New normal for Canada rates lower that in the past
RBNZ: No further hikes until Dec 2015 - ANZ
Australian jobs beat estimates, part-time driven
South Korea BoK Interest Rate Decision unchanged at 2% in December
Talk of rate cuts in NZ misguided - BNZ
Australia: Breakdown of details highlights soft labour market - Westpac
Australia Consumer Inflation Expectation: 3.4% (December)
Japan Tertiary Industry Index (MoM) below forecasts (-0.1%) in October: Actual (-0.2%)
Japan Foreign investment in Japan stocks rose from previous ¥-53B to ¥481.9B in December 5
Japan Machinery Orders (YoY) below expectations (-0.3%) in October: Actual (-4.9%)
Japan Foreign bond investment fell from previous ¥3.4B to ¥-852.2B in December 5
Japan Machinery Orders (MoM) came in at -6.4% below forecasts (-2.4%) in October
United Kingdom RICS Housing Price Balance below forecasts (17%) in November: Actual (13%)