Intraday Market Thoughts

300 Pip Days are Here Again, China GDP Next

by Adam Button
Jan 17, 2013 22:57

Major moves continued and USD/JPY broke above 90 and as the heightened volatility of 2013 continued. The euro was the top performer while the yen lagged; EUR/JPY broke 120 and the pair was nearly 300 pips higher on the day. The excitement will continue through Asia-Pacific trading with major Chinese data on the docket, including Q4 GDP. For a sample of the latst Premium Insights, please see below.

Chatter about the Fed pulling back on QE programs ramped up after initial jobless claims fell to a five-year low, dropping to 335K compared to 365K expected.

At the same time, housing starts surged to a post-crisis high of 954K, soaring past the 890K expected. The US dollar was broadly stronger after the reports and the euro slid to 1.3335 from 1.3375.

The euro gains began to reverse after a disappointing Phily Fed. The manufacturing index was at -5.8 compared to the +5.8 consensus forecast.


Overall sentiment helped boost commodity currencies and the S&P 500 closed 0.6% higher to a 5-year high.

The yen slowly and steadily wilted throughout European and US trading. A Reuters report helped give EUR/JPY the final push above 120. According to a source, the BOJ is considering a pledge to unlimited asset purchases until 2% inflation is within reach. That could be combined with a removal of the 0.1% floor for interest on excess reserves.

The BOJ decision is on Tuesday and it is one of the most highly-anticipated Japanese decisions in years. As speculation grows so does the chance of nervous longs taking profits so stay on guard.

The major event of today's Asian session is Chinese fourth quarter GDP at 0200 GMT. The consensus is 7.8% but given the strong import/export numbers last week, there could be an upside bias. At the same time, December industrial production and retail sales figures will be published.

Early in Asia-Pacific trading, New Zealand released quarterly CPI numbers. Prices declined 0.2% q/q compared to the 0.1% rise expected and the kiwi dollar fell nearly a full cent to 0.8328 before rebounding to 0.8360.

Act Exp Prev GMT
Industrial Production (NOV) (m/m)
1.6% Jan 18 4:30
Industrial Production (NOV) (y/y)
-4.5% Jan 18 4:30
Industrial Production (DEC) (y/y)
10.1% 10.1% Jan 18 2:00
Retail Sales (DEC) (y/y)
14.9% 14.9% Jan 18 2:00
Consumer Price Index (Q4) (q/q)
-0.2% 0.1% 0.3% Jan 17 21:45
Consumer Price Index (Q4) (y/y)
0.9% 1.2% 0.8% Jan 17 21:45
Housing Starts (DEC) (m/m)
0.954M 0.890M 0.851M Jan 17 13:30
Initial Jobless Claims (JAN 12)
335K 365K 372K Jan 17 13:30
Continuing Jobless Claims (JAN 6)
3.214M 3.159M 3.127M Jan 17 13:30

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