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3 Dec 2014
Asia Recap: Aussie knocked down on downbeat Aus Q3 GDP
FXStreet (Bali) - The Aussie was the worst performer in Asia, following a big miss in the Australian GDP Q3 print, with the US Dollar performing another strong session.
AUD/USD broke below the 0.84 handle with the market resetting shorts after disappointing Australian GDP Q3 number, way off the market consensus, coming at +0.3% vs 0.7% exp and 0.5% last, with the yearly reading for Q3 standing at +2.7% vs 3.1% exp and 3.1% last. The lowest came at 0.8388 before the rate stabilized just above the 0.84, but with bounces very limited, the downside risks remain heading into Europe. OIS market now pricing in 21bp of RBA cuts over 12m vs 14bp prior.
USD/JPY, saw another round of USD buying, taking the rate all the way to 119.41 before a settling around 119.15/20, with prospects of further gains towards 119.50 and ultimately 120.00 looking rosier. It is worth noting though, that with two key risk events around the corner (ECB on Thursday and US NFP on Friday), the market may be somewhat cautious to add into USD longs, suggesting that any leveraged-led bull run towards 120.00 ahead of the latter (NFP) may see lack of follow through.
NZD/USD traded on the back-foot, with sellers building on recent bearish momentum to test 0.7770, although failure to see any follow through led to a modest rebound towards 0.7790. Kiwi sentiment has recently taken a hit, following another negative Fonterra dairy auction on Tuesday. ANZ reports: "GDT auction prices were down 1.1%. Whole milk powder down 7.1% – average price of US$ 2,229/mt though we note some firming across the back-end contracts. Skim milk powder (SMP) rose 5.7% (though this only reverses the prior auctions decline) and butter up 7.3% so some better looking detail in pockets and we note SMP powder led aggregate prices down so farmers will be hoping it cuts both ways."
The rest of the G10 FX space was sedated, as expected, ahead of the ECB monetary policy meeting. EUR/USD remains below 1.24, buffeted in a tiny 1.2375-90 range, while GBP/USD found support at 1.5630, but bounces were capped by 1.5650. Gold trades stuck at $1,200 after the incredible commodity bounce seen on Monday, while Oil future contracts exchange hands at 67.50. In the equity front, the Nikkei 225 was up by 0.5%, buoying Yen shorts.
Key headlines
ANZ: Fonterra GDT auction down but basing?
Australia AiG Performance of Services Index rose from previous 43.6 to 43.8 in November
United Kingdom BRC Shop Price Index (MoM): -1.9% (November)
Australia's GDP Q3 misses expectations by large margin
China Non-manufacturing PMI: 53.9 (November) vs 53.8
NZ FinMin: Country can withstand declines in dairy prices
Japan Markit Services PMI fell from previous 52.4 to 51.2 in November
China HSBC China Services PMI increased to 53 in November from previous 52.9
AUD/USD broke below the 0.84 handle with the market resetting shorts after disappointing Australian GDP Q3 number, way off the market consensus, coming at +0.3% vs 0.7% exp and 0.5% last, with the yearly reading for Q3 standing at +2.7% vs 3.1% exp and 3.1% last. The lowest came at 0.8388 before the rate stabilized just above the 0.84, but with bounces very limited, the downside risks remain heading into Europe. OIS market now pricing in 21bp of RBA cuts over 12m vs 14bp prior.
USD/JPY, saw another round of USD buying, taking the rate all the way to 119.41 before a settling around 119.15/20, with prospects of further gains towards 119.50 and ultimately 120.00 looking rosier. It is worth noting though, that with two key risk events around the corner (ECB on Thursday and US NFP on Friday), the market may be somewhat cautious to add into USD longs, suggesting that any leveraged-led bull run towards 120.00 ahead of the latter (NFP) may see lack of follow through.
NZD/USD traded on the back-foot, with sellers building on recent bearish momentum to test 0.7770, although failure to see any follow through led to a modest rebound towards 0.7790. Kiwi sentiment has recently taken a hit, following another negative Fonterra dairy auction on Tuesday. ANZ reports: "GDT auction prices were down 1.1%. Whole milk powder down 7.1% – average price of US$ 2,229/mt though we note some firming across the back-end contracts. Skim milk powder (SMP) rose 5.7% (though this only reverses the prior auctions decline) and butter up 7.3% so some better looking detail in pockets and we note SMP powder led aggregate prices down so farmers will be hoping it cuts both ways."
The rest of the G10 FX space was sedated, as expected, ahead of the ECB monetary policy meeting. EUR/USD remains below 1.24, buffeted in a tiny 1.2375-90 range, while GBP/USD found support at 1.5630, but bounces were capped by 1.5650. Gold trades stuck at $1,200 after the incredible commodity bounce seen on Monday, while Oil future contracts exchange hands at 67.50. In the equity front, the Nikkei 225 was up by 0.5%, buoying Yen shorts.
Key headlines
ANZ: Fonterra GDT auction down but basing?
Australia AiG Performance of Services Index rose from previous 43.6 to 43.8 in November
United Kingdom BRC Shop Price Index (MoM): -1.9% (November)
Australia's GDP Q3 misses expectations by large margin
China Non-manufacturing PMI: 53.9 (November) vs 53.8
NZ FinMin: Country can withstand declines in dairy prices
Japan Markit Services PMI fell from previous 52.4 to 51.2 in November
China HSBC China Services PMI increased to 53 in November from previous 52.9