Forex Afternoon Wrap – 08/12

Japan third quarter GDP revised to 0.3%; annualized GDP at 1.0%

• Japan GDP annualized Q3 1.0% vs. 0.2%
• Japan GDP q/q Q3 0.3% vs. 0.1%
• Australia NAB business confidence 5 vs. 3 previously
• China exports y/y -6.8% vs. -5.0%; imports y/y -8.7% vs. -11.9%
• China trade balance 54.10bn vs. 64bn
• BoJ Governor Kuroda speech
• UK Halifax house prices 3m/y 0.9% vs. 9.5%
• UK Manufacturing production m/m -0.4% vs. -0.2%; y/y -0.1% vs. 0.0%
• UK Industrial production m/m0.1% vs. 0.1%; y/y 1.7% vs. 1.2%
• Eurozone GDP q/q 0.3% vs. 0.3%; y/y 1.6% vs. 1.6%
• Canada Housing starts 211.9k vs. 200k
• Canada building permits m/m 9.1% vs. 2.9%

Later

• UK NIESR GDP Estimates
• US JOLTS Job openings
• BoC Gov. Poloz speech

The markets opened this morning to Japan’s GDP numbers which looked far better compared to the first estimates. Confirmed, the third quarter GDP for Japan rose 1.0%, beating estimates of 0.20% on an annualized basis while the quarterly GDP growth increased 0.30% beating estimates of 0.10%. The Yen was initially weaker in early trading but soon gained momentum as a modest risk on sentiment engulfed the markets. At the time of writing, the Yen was trading stronger with USDJPY down -0.40% for the day after trading near 123.42 in yesterday’s trading. Against other peers, the Yen is trading strong across the board.

The Asian session saw the Australia NAB business confidence data which jumped to 5 from 3 previously. However, weaker commodity prices took their toll on the AUD and the NZD. AUDUSD is down -0.94% at the time of writing, posting a steady decline for the second day in a row, trading near a 5-day low at 0.720. The NZDUSD is also into a second day of declines, down -0.33% for the day as the currency posted a session low below 0.6618 before managing to recover back.

China’s trade balance fell to $54.10bn below estimates of $64bn with exports declining -6.8% while imports fell -8.7% for the year. Exports however outstripped the imports posting a sharp decline. The trade balance data saw the markets turn to a risk on sentiment leading to the Yen staging strong gains during the day.

The European markets saw the Eurozone GDP numbers which came out as expected, rising 0.30% for the third quarter and 1.60% on an annualized basis. The EURUSD is up a modest 0.40% at the time of writing but remains within last Thursday’s range.

From the UK, industrial and manufacturing production numbers came out mixed with the UK’s manufacturing falling -0.40% for the month, below estimates of -0.20% declines while falling -0.10% on an annualized basis. Industrial production remained better in comparison, rising 0.10% as expected while posting a 1.70% growth on an annualized basis. The British Pound was however mixed on the data. GBPUSD is down -0.54% for the day with the Cable currently posting a session low below 1.498 briefly.

The US trading session saw the Canadian housing data. Housing starts increased 211.9k above estimates of 200k while building permits increased 9.10% above the 2.90% estimates. USDCAD was however unmoved albeit posting a strong spike to 1.3619 before easing back lower and is up 0.68% for the day.

On the commodities front, the markets remain subdued. WTI Crude Oil is now trading at $36.90 a barrel, down -1.97% for the day while Gold futures erased earlier gains to dip lower by -0.11% trading at $1068 an ounce.

The remainder of the evening is largely quiet with no major news releases scheduled. US Crude Oil inventories report is due out later today which could keep the Oil markets volatile while BoC Governor, Poloz is due to speak at an event.