Forex: Aussie Dollar Gains, Yen Drops on China Data and Syria Hopes

2013-09-10 09:19:00 Ilya Spivak, Head Strategist, APAC

Talking Points

Risk Appetite Swells Amid Easing Risk of Western Intervention in Syria
Aussie Dollar Higher, Japanese Yen Sold on Pickup in Market Sentiment
S&P 500 Futures Hint Positive Market Mood Likely to Carry Forward

The Australian Dollar outperformed in overnight trade, rising as much as 0.6 percent on average against its leading counterparts. The sentiment-sensitive currency was pulled higher as stocks continued to rise across Asian bourses, with regional shares adding 1.1 percent on average. The Japanese Yen underperformed as the “risk-on” mood drove demand for carry trades funded in terms of the perennially low-yielding currency. The unit fell as much as 0.6 percent on average against the G10 majors.

The positive tone appears to have followed comments from US President Obama, who said in an interview that a Russia-proposed arrangement that would see Syria surrender its chemical weapons could put on hold the push to initiate military intervention against the government of President Bashar al-Assad. Traders have worried that Western intervention might widen the conflict, disrupting oil shipments from the region and undermining the global recovery.

Another supportive set of Chinese economic data underpin investors’ chipper mood. The East Asian giant reported that Industrial Production rose 10.4 percent year-on-year in August, topping median forecasts calling for a 9.9 percent increase and yielding the best reading since March 2012. Retail Sales rose 13.4 percent over the same period, recording the biggest gain since December 2012.

A quiet economic calendar hints sentiment trends are likely to remain in control for the time being. European stock exchanges are following their Asian counterparts upward and S&P 500 futures are pointing firmly higher, suggesting the markets’ rosy disposition is likely to carry forward as Wall Street comes online.

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Asia Session:

GMT	CCY	EVENT	ACT	EXP	PREV
22:45	NZD	Card Spending Retail (MoM) (AUG)	0.8%	0.6%	0.5%
22:45	NZD	Card Spending Total (MoM) (AUG)	0.4%	-	0.4%
23:01	GBP	RICS House Price Balance (AUG)	40%	39%	37%
23:50	JPY	Bank of Japan August 7-8 Meeting Minutes	-	-	-
23:50	JPY	Japan Money Stock M2 (YoY) (AUG)	3.7%	3.8%	3.7%
23:50	JPY	Japan Money Stock M3 (YoY) (AUG)	3.0%	3.0%	3.0%
23:50	JPY	Tertiary Industry Index (MoM)	-0.4%	-0.5%	-0.5%
1:30	AUD	NAB Business Conditions (AUG)	-6	-	-7
1:30	AUD	NAB Business Confidence (AUG)	6	-	-3
5:30	CNY	Industrial Production YTD (YoY) (AUG)	9.5%	9.4%	9.4%
5:30	CNY	Industrial Production (YoY) (AUG)	10.4%	9.9%	9.7%
5:30	CNY	Fixed Assets Ex Rural YTD (YoY) (AUG)	20.3%	20.2%	20.1%
5:30	CNY	Retail Sales YTD (YoY) (AUG)	12.8%	12.9%	12.8%
5:30	CNY	Retail Sales (YoY) (AUG)	13.4%	13.3%	13.2%
6:00	JPY	Machine Tool Orders (YoY) (AUG P)	-1.8%	-	-12.2%

Euro Session:

GMT	CCY	EVENT	EXP/ACT	PREV	IMPACT
6:45	EUR	French Industrial Production (MoM) (JUL)	-0.6% (A)	-1.4%	Low
6:45	EUR	French Industrial Production (YoY) (JUL)	-1.8% (A)	-0.1%	Low
6:45	EUR	French Manufacturing Production (MoM) (JUL)	-0.7% (A)	-0.4%	Low
6:45	EUR	French Manufacturing Production (YoY) (JUL)	-2.5% (A)	-0.4%	Low
8:00	CNY	New Yuan Loans (AUG)	711.3B (A)	699.9B	Medium
8:00	CNY	Aggregate Financing RMB (AUG)	1570.0B (A)	808.8B	Medium
8:00	CNY	Money Supply M2 (AUG)	14.7% (A)	14.5%	Medium
8:00	EUR	Italian GDP s.a. and w.d.a. (QoQ) (2Q F)	-0.3% (A)	-0.2%	Medium
8:00	EUR	Italian GDP s.a. and w.d.a. (YoY) (2Q F)	-2.1% (A)	-2.0%	Medium