Forex Afternoon Wrap – 12/11

Aussie jumps as unemployment rate falls to 5.9%

• Japan core machinery orders m/m 7.5% vs. 3.3%
• Japan PPI y/y -3.8% vs. -3.5%
• Australia MI Inflation expectations 3.5% vs. 3.5% previously
• Australia employment change 58.6k vs. 14.8k; Unemployment rate 5.9% vs. 6.2%
• Germany Final CPI m/m 0.0% vs. 0.0%
• France CPI m/m 0.1% vs. 0.1%
• China M2 Money supply y/y 13.5% vs. 13.2%
• ECB President Draghi speech
• Eurozone industrial production m/m -0.3% vs. -0.1%
• Canada NHPI m/m 0.1% vs. 0.2%
• US Weekly unemployment claims 276k vs. 270k

Later

• Fed Chair Yellen speech
• FOMC Member Evans speech
• Crude Oil inventories
• MPC Member Haldane speech
• FOMC Member Dudley speech

The Asian trading session got off to a busy start with the Australian unemployment numbers being the main event. Surprising on all fronts the unemployment rate in Australia fell to 5.9% from 6.2% previously and the monthly employment changed increased to 58.6k beating estimates of 14.8k. The Aussie dollar surged on the news and is currently up 0.64% after the currency eased back from the daily highs of 0.7151.

The Kiwi dollar is down -0.58% for the day and continues to remain weak after breaking below yesterday’s low.

The Japanese Yen was weaker in today’s session as USDJPY managed to gains 0.1% for the day but with resistance established at 123.03 USDJPY could look for a decline lower, unless the resistance is broken at 123.03 which could see prices rally and potentially test the previous highs near 124 region.

The European trading session saw the German inflation data remaining unchanged at 0.0% while French CPI managed to rise 0.1% matching estimates. ECB’s Draghi in his speech earlier today sent the Euro lower as he talked about the possibility of QE expansion. EURUSD is down -0.13% for the day trading at 1.073 after the currency dipped to session lows of 1.069 before managing to pull back higher.

GBPUSD is down -0.15% for the day as the Cable eased back strongly from early session highs near 1.523 and turned bearish. The declines mark a short term top in the markets coming off nearly three straight sessions of gains.

In the US session, Canada’s housing price index rose less than expected at 0.1% missing expectations of 0.2%. USDCAD continued to surge higher on a weaker Canadian dollar and oil prices which have continued to trend lower recently. USDCAD is up 0.41% at the time of writing.

From the US, the weekly unemployment claims increased more than expected to 276k missing estimates of 270k. The US Dollar initially reacted bearishly to the news but managed to recover from the declines as the US Dollar Index is up 0.15% for the day.

The remainder of the evening will see a lot of FOMC members speaking including Fed Chair Janet Yellen. The Fed speeches come off last week’s NFP report and the members could be seen taking a hawkish stand in the markets. Expect some market volatility as the Fed members start to speak later this evening.