Yen posts another day of gains on risk aversion

Today’s Economic Data:

• Japan trade balance -1035mn vs. -875mn
• Japan flash manufacturing PMI 50.9 vs. 51.3
• Japan all industries activity 0.2% vs. 0.1%
• German Gfk consumer climate 9.6 vs. 9.8
• German Ifo business climate 108.5 vs. 107.8
• UK BBA mortgage approvals 46.7k vs. 46.3k
• Italy retail sales m/m 0.4% vs. 0.2%
• ECB TLTRO 15.5bn vs. 50.3bn
• US Core durable goods orders m/m 0.0% vs. 0.2%; durable goods orders m/m -2.0% vs. -2.0%
• US Weekly unemployment claims 267k vs. 268k

Later:

• US New home sales

The Asian equity markets opened today on a mixed note with the Nikkei down -2.76% while the Shanghai composite gained a modest 0.89%. The Hang Seng was down -0.97% and the main theme of a stronger Yen carried on through to the start of the US trading session. On the currency side of things, the Asian markets saw the Kiwi post modest gains of 0.30%  for the day after the currency slipped to lows of 0.6238 yesterday. The Kiwi was lifted by better Fonterra data but the trade balance released few hours later kept the currency subdued. The Aussie continued its prolonged downtrend, losing -0.63% for the day, posting a near 5 day decline with no signs of recovery.

Data from the Asian session included the Japan flash manufacturing PMI which was soft at 50.9, below estimates of 51.3, while the all industries activity was up 0.2%, beating estimates of 0.1%.

The European session was geared up for the German Gfk and Ifo releases which came out mixed. While consumer climate was soft at 9.6, the Ifo business climate proved to be more positive, rising 108.5 beating estimates of 107.8. The Euro managed to continue its recovery since yesterday, which was triggered by a rather neutral tone from Mario Draghi. The Euro was up 0.50% for the day as the single currency was seen testing the highs near 1.124 at the time of writing. The Euro’s recovery was broad based gaining against all of its peers. Other data from Eurozone included Italy’s retail sales which grew 0.4% for the month.

The British Pound on the other hand continued to post losses, down -0.23% for the day as the currency failed near the daily pivot level of 1.5277 and posted declines trading near session lows of 1.521. There were no major data releases from the UK today.

The ECB’s TLTRO yet again saw a weak take up with banks using only 15.5bn of the funding, falling short of estimates of 50.3 billion.

The US trading session saw the monthly durable goods numbers which did not surprise and came in soft for the month. The weekly unemployment claims however managed to post another week of gains as the unemployment claims rose less than expected to 267k, below estimates of 268k. The US Dollar was trading weak today, losing -0.35% at the time of writing, after the currency index posted highs of 96.71 yesterday.

The US new home sales data is the only remaining economic data due later in the day.