When good is bad and bad is bad.
The BAD: Data today in Australia revealed a much worse than expected outcome for the Jobs market last month. Australia cut 22.6k jobs compared to consensus expectations of a 10k increase. The impact was swift. The AUD was hit losing a significant amount of ground settling around 0.88 versus USD. Clearly there has been a worsening in job market conditions over recent months and while I am still constructive on AUD the trend in jobs is sending a worrying signal.
The GOOD: Japan machinery orders rose strongly up 9.3% in November compared to the previous month. This was cited as evidence that Abenomics is working although I’ll only believe this when we see evidence of structural reforms. Nonetheless, it was sufficient to be bad for the JPY with USD/JPY pushing eventually back towards 105. I remain negative on the yen and ultimately see higher US bond yields pushing USD/JPY even higher.