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28 Aug 2015
Yen better bid in Asia, ignores Japan’s CPI, UK GDP, German CPI – Up next
FXStreet (Mumbai) - Rallying Asian equities and rebounding commodities continued to boost risk sentiment in Asia with the EM currencies enjoying some gains while the yen too remained better bid amid broad based US dollar retreat, as markets brushed-off subdued Japanese inflation figures.
Key headlines in Asia
Japanese inflation subdued, 2% target deadline realistic?
China July industrial profits worse-than-expected
Nikkei leads Asian indices higher, rally extends
Dominating themes in Asia - centered on JPY, AUD, NZD
A low-key affair in Asia, with the Asian equities extending their recovery path after Monday’s crash while rebounding oil and gold prices also lifted the market sentiment.
The Antipodeans rejoiced the recovery in commodity prices in early moves; however, gains were washed away after China reported industrial profits which revealed a worse than expected drop in July. The Aussie faced rejection at 0.72 handle and shaved-off gains to trade muted near 0.7160 levels. NZD/USD too trimmed gains and mires near lows around 0.6470.
The dollar-yen pair gave up the 121 handle as US dollar took a breather after the recent upsurge supported by upbeat US Q2 GDP data, which added to the recent series of positive US fundamentals. Whilst, the yen remained better bid against the greenback despite subdued Japan’s CPI data released earlier this session. The National core CPI was flat in July after rising 0.2% y/y in June, according to the Statistics Bureau, while the more timely Tokyo CPI measure fell 0.1% year-on-year in August, the same pace as July.
The Asian equities witnessed strong gains, with the Hong Kong's benchmark Hang Seng index gaining 0.28% at 21900 while mainland China's benchmark Shanghai Composite gains +1.93% at 3143. Among other Asian indices, the Japanese benchmark Nikkei 225 rockets over 3% at 19163 despite slightly stronger yen. While the benchmark Australian S&P/ASX 200 pared gains and now trades +0.28% at 5247.
Heading into Europe - centered on EUR, GBP
Finally an eventful European session to be witnessed ahead, after a data-quiet week from the Euro zone.
The UK is expected to publish its 2nd GDP estimate for the second quarter. Markets expect 0.7% growth in Q2 quarter-on-quarter, while annual GDP growth is expected to show 2.6% expansion, the same as in the 1st estimate.
Germany will release its final inflation data for August, with CPI growth seen flat on a monthly basis after a 0.2% result reported a month ago, while adding 0.2% annually, same as the 0.2% preliminary result.
Looking ahead, the New York session offers Fed’s favorite inflation gauge, the core PCE price index while US goods trade balance, personal spending and revised consumer sentiment will also be on the cards.
The inflation index tied to personal consumption expenditures (PCE), specifically the core component which excludes volatile food & energy costs, is expected to remain unchanged at 1.3% in July after increasing 0.1% for the month.
While the key event – Jackson Hole Symposium will head in to day 2. The Economic Symposium, held in Jackson Hole, Wyoming, is attended by central bankers, finance ministers, academics, and financial market participants from around the world.
EUR/USD Technicals
AceTrader Research team noted, “Despite euro's rally to as high as a fresh 7-month peak at 1.1715 on Monday on dollar's broad-based selloff due to the near 600 points fall in Dow Jones Index, subsequent strong retreat suggests a temporary top has been made and consolidation with downside bias would be seen for a stronger retracement towards 1.1250/60, then 1.1214 later this week. However, near term loss of momentum would keep price above 1.1177 and yield a much-needed rebound.”
On the upside, only above 1.1562 would indicate aforesaid pullback has ended and turn outlook bullish for a re-test of said top, break would extend gain towards 1.1750/54.”
Key headlines in Asia
Japanese inflation subdued, 2% target deadline realistic?
China July industrial profits worse-than-expected
Nikkei leads Asian indices higher, rally extends
Dominating themes in Asia - centered on JPY, AUD, NZD
A low-key affair in Asia, with the Asian equities extending their recovery path after Monday’s crash while rebounding oil and gold prices also lifted the market sentiment.
The Antipodeans rejoiced the recovery in commodity prices in early moves; however, gains were washed away after China reported industrial profits which revealed a worse than expected drop in July. The Aussie faced rejection at 0.72 handle and shaved-off gains to trade muted near 0.7160 levels. NZD/USD too trimmed gains and mires near lows around 0.6470.
The dollar-yen pair gave up the 121 handle as US dollar took a breather after the recent upsurge supported by upbeat US Q2 GDP data, which added to the recent series of positive US fundamentals. Whilst, the yen remained better bid against the greenback despite subdued Japan’s CPI data released earlier this session. The National core CPI was flat in July after rising 0.2% y/y in June, according to the Statistics Bureau, while the more timely Tokyo CPI measure fell 0.1% year-on-year in August, the same pace as July.
The Asian equities witnessed strong gains, with the Hong Kong's benchmark Hang Seng index gaining 0.28% at 21900 while mainland China's benchmark Shanghai Composite gains +1.93% at 3143. Among other Asian indices, the Japanese benchmark Nikkei 225 rockets over 3% at 19163 despite slightly stronger yen. While the benchmark Australian S&P/ASX 200 pared gains and now trades +0.28% at 5247.
Heading into Europe - centered on EUR, GBP
Finally an eventful European session to be witnessed ahead, after a data-quiet week from the Euro zone.
The UK is expected to publish its 2nd GDP estimate for the second quarter. Markets expect 0.7% growth in Q2 quarter-on-quarter, while annual GDP growth is expected to show 2.6% expansion, the same as in the 1st estimate.
Germany will release its final inflation data for August, with CPI growth seen flat on a monthly basis after a 0.2% result reported a month ago, while adding 0.2% annually, same as the 0.2% preliminary result.
Looking ahead, the New York session offers Fed’s favorite inflation gauge, the core PCE price index while US goods trade balance, personal spending and revised consumer sentiment will also be on the cards.
The inflation index tied to personal consumption expenditures (PCE), specifically the core component which excludes volatile food & energy costs, is expected to remain unchanged at 1.3% in July after increasing 0.1% for the month.
While the key event – Jackson Hole Symposium will head in to day 2. The Economic Symposium, held in Jackson Hole, Wyoming, is attended by central bankers, finance ministers, academics, and financial market participants from around the world.
EUR/USD Technicals
AceTrader Research team noted, “Despite euro's rally to as high as a fresh 7-month peak at 1.1715 on Monday on dollar's broad-based selloff due to the near 600 points fall in Dow Jones Index, subsequent strong retreat suggests a temporary top has been made and consolidation with downside bias would be seen for a stronger retracement towards 1.1250/60, then 1.1214 later this week. However, near term loss of momentum would keep price above 1.1177 and yield a much-needed rebound.”
On the upside, only above 1.1562 would indicate aforesaid pullback has ended and turn outlook bullish for a re-test of said top, break would extend gain towards 1.1750/54.”