9 Jul 2015
Solid Aus jobs, China CPI drive Aussie higher, BOE – Next in focus
FXStreet (Mumbai) - Focus shifted from Greece and FOMC minutes in Asia as markets cheered upbeat China’s inflation as well Australia’s employment report, boosting the antipodean currencies across the board. While USD/JPY rebounded sharply from fresh 2-month lows and swung back higher above 121 barrier.
Key headlines in Asia
China Consumer Price Index (YoY) above forecasts (1.3%) in June: Actual (1.4%)
China police to investigate malicious short selling of stocks - Xinhua
Australia prints solid June employment report
Dominating themes in Asia - centered on JPY, AUD, NZD
Rebounding Chinese stocks and a set of above estimates macro releases from China and Australia brought renewed optimism across the FX space in Asia.
Aussie benefitted the most among the G10 currencies so far after solid Aus jobs data and uptick in Chinese price pressures lifted the AUD/USD pair from six year lows and now remains strongly bid above 0.7450 levels. While the Kiwi tracked the Aussie higher and reversed overnight losses and trades comfortably above 0.67 barrier. China is both Australia’s and New Zealand’s top trading partner.
On data front, National Bureau of Statistics of China said that Chinese CPI rose to an annual rate of 1.4%, in June from 1.2% in May. While Australian employment change for June came at 7.3k versus -5k expected and 42k last. The jobless rate was flat at 6% versus 6.1% estimates.
Among the Asian indices, China stocks bucked the trend and rebounded today amid positive domestic data and latest government measures to stop the recent carnage.
The Shanghai composite index now trades -1.30% higher at 3552.78. While The Nikkei 225 in Tokyo drops -1.33%, to trade at 19474, Australian benchmark the ASX 200 also tagged along, down -0.18% and trades at 5459. South Korea’s Kospi is losing -0.25% and trades at 2011.
Heading into Europe - centered on EUR, GBP
There is nothing much to report in the European session ahead in terms of economic releases except German trade figures, however, market participants will be focusing on the Bank of England’s (BOE) rate and QE announcement later today.
It is very likely the central bank will leave its monetary policy stance unchanged in July – the base rate will stay at the record low of 0.5% and the QE volume at £375 billion. More details will be revealed in the MPC minutes due on July 22. Based on the most recent speeches and interviews by BoE rate-setters, we can expect a divide between the policymakers on the timing of the rate lift-off.
Germany will report trade activities in May, with the trade balance expected to reach €20.5 billion, worse than the €22.1 billion seen in April. While, the International Monetary Fund (IMF) will publish revisions to its World Economic Outlook report in Washington.
Looking ahead, the North American session offers housing data from Canada, while weekly jobless claims from the US will be report ahead of the US open. FOMC Member Brainard is due to speak at the Bipartisan Policy Center, in Washington.
EUR/USD Technicals
Valeria Bednarik, Chief Analyst at FXStreet explains, “(EUR/USD) the 1 hour chart shows that the price found resistance in its 200 SMA, having been consolidating in between it and the 100 SMA, currently around 1.1040 for most of the American afternoon. In the same chart, the technical indicators present a mild positive tone, something which should keep the downside limited in the short term."
"In the 4 hours chart the price has extended below a still bearish 20 SMA, whilst the Momentum indicator heads higher above the 100 level and the RSI hovers around 53, all of which supports the shorter term view. Nevertheless, the price needs to advance above the 1.1120 resistance, to be able to extend its gains over the upcoming sessions.”
Key headlines in Asia
China Consumer Price Index (YoY) above forecasts (1.3%) in June: Actual (1.4%)
China police to investigate malicious short selling of stocks - Xinhua
Australia prints solid June employment report
Dominating themes in Asia - centered on JPY, AUD, NZD
Rebounding Chinese stocks and a set of above estimates macro releases from China and Australia brought renewed optimism across the FX space in Asia.
Aussie benefitted the most among the G10 currencies so far after solid Aus jobs data and uptick in Chinese price pressures lifted the AUD/USD pair from six year lows and now remains strongly bid above 0.7450 levels. While the Kiwi tracked the Aussie higher and reversed overnight losses and trades comfortably above 0.67 barrier. China is both Australia’s and New Zealand’s top trading partner.
On data front, National Bureau of Statistics of China said that Chinese CPI rose to an annual rate of 1.4%, in June from 1.2% in May. While Australian employment change for June came at 7.3k versus -5k expected and 42k last. The jobless rate was flat at 6% versus 6.1% estimates.
Among the Asian indices, China stocks bucked the trend and rebounded today amid positive domestic data and latest government measures to stop the recent carnage.
The Shanghai composite index now trades -1.30% higher at 3552.78. While The Nikkei 225 in Tokyo drops -1.33%, to trade at 19474, Australian benchmark the ASX 200 also tagged along, down -0.18% and trades at 5459. South Korea’s Kospi is losing -0.25% and trades at 2011.
Heading into Europe - centered on EUR, GBP
There is nothing much to report in the European session ahead in terms of economic releases except German trade figures, however, market participants will be focusing on the Bank of England’s (BOE) rate and QE announcement later today.
It is very likely the central bank will leave its monetary policy stance unchanged in July – the base rate will stay at the record low of 0.5% and the QE volume at £375 billion. More details will be revealed in the MPC minutes due on July 22. Based on the most recent speeches and interviews by BoE rate-setters, we can expect a divide between the policymakers on the timing of the rate lift-off.
Germany will report trade activities in May, with the trade balance expected to reach €20.5 billion, worse than the €22.1 billion seen in April. While, the International Monetary Fund (IMF) will publish revisions to its World Economic Outlook report in Washington.
Looking ahead, the North American session offers housing data from Canada, while weekly jobless claims from the US will be report ahead of the US open. FOMC Member Brainard is due to speak at the Bipartisan Policy Center, in Washington.
EUR/USD Technicals
Valeria Bednarik, Chief Analyst at FXStreet explains, “(EUR/USD) the 1 hour chart shows that the price found resistance in its 200 SMA, having been consolidating in between it and the 100 SMA, currently around 1.1040 for most of the American afternoon. In the same chart, the technical indicators present a mild positive tone, something which should keep the downside limited in the short term."
"In the 4 hours chart the price has extended below a still bearish 20 SMA, whilst the Momentum indicator heads higher above the 100 level and the RSI hovers around 53, all of which supports the shorter term view. Nevertheless, the price needs to advance above the 1.1120 resistance, to be able to extend its gains over the upcoming sessions.”