Summary:

• Australian trade data comes in below forecasts taking the Aussie lower
• AUDNZD could be at a turning point given a technical view
• Asian equity markets extend their recent gains being on the verge of the best week in almost 6 months

Beginning with the currency market one may conclude that the US dollar has been among worst performers during the Asian session as traders are awaiting the employment report for December. Consequently, the EURUSD is trading above 1.2070 at the time of writing while the USDJPY has resumed its upward trend. Nevertheless the Japanese yen and the Australian dollar have been the most beleaguered currencies over the course of the latest hours for two reasons. First and foremost, the yen is down due to another splendid session seen in the NIKKEI (JAP225 on xStation5) which is set to end the day with a 0.9% advance. Let us indicate that the USDJPY could continue its surge even up to 125 based on the recent performance seen in the Japan’s stock market.

Australian trade data disappointed in November printing the second deficit on the trot. Source: Macrobond, XTB Research

In turn the Australian dollar is chiefly down on a miss in the trade data which saw a November’s deficit at 628 million AUD whereas the consensus had called for a 550 million AUD surplus. While exports were flat on the month, imports grew by 1% mom, however in a year-over-year basis a slump in exports was by far more severe pushing the figure to the lowest since early 2016. As a result the trade deficit turned out to be the largest since the end of last 2016 and two back to back deficits (the value for October was revised down from +105 to -302 million AUD) might be a bit surprising given decent rises in most of Australia’s commodity and services exports along with rising commodity prices which are a sign of a robust global economic backdrop. Among the largest culprits one may single out weaker coal and grain exports.

While the AUD has underperformed of late its counterpart in New Zealand has kept its decent momentum. In effect, the cross could be prone to reinitiate a deeper downward move as the pair seems to respect a resistance placed at 1.10. If so bears could count on a pullback even toward 1.0750 where a relevant support area is localized. Source: xStation5

Finally let’s write something about the Asian stock markets which another session in a row seem to take their cue from the US counterparts. As a result the Asian equities are already on the verge of their best week in almost six months. Let us notice that investors all around the world appear to pile into equities which ought to gain amid solid economic growth in the US and elsewhere alike. However, assuming that we’ve already entered an advanced phase of the global recovery investors could eye commodities as well as they might draw attention this year. If so, the two classes of assets seem to be well positioned for 2018 barring unexpected shocks to the global economy.