Highlights April 27, 2022 / 05:22 am UTC

Asia Summary and Highlights 27 April

By Cephas Kin Long Yung

Australia Headline CPI +2.1% q/q vs expected 1.7% q/q and +5.1% y/y vs expected 4.6%y/y.

Australia Trimmed mean +1.4% q/q vs expected 1.2% and +3.7% y/y vs expected 3.4% y/y

Shanghai flagging lock down easing while Beijing undergoes more lock down

Asia Session

On the data front, we have Australian Headline CPI +2.1% q/q & +5.1% y/y and trimmed mean +1.4% q/q & +3.7% y/y. Australian economy continues to show strength with evidence in this high beat of CPI. While high CPI has been watered down by RBA on not being sustainable, we may have a difference response this time as RBA's trimmed mean CPI breached 3% on a year to year basis and is approaching 4%. It echoes with our forecast of a June hike for RBA. AUD/USD is trading higher at 0.7160 from 0.7120. Kiwi dragged higher to 0.6585 from 0.6560. Loonie also benefited from overnight higher oil to USD/CAD 1.2782 from 1.2830.

Headlines in Asia are sending mixed signals but market is attempting a bounce after the overnight slaughter. Beijing's Tongzhou district is under more restriction, so as certain Beijing district. On the other hand, Shanghai officials are flagging lock down easing as situation improves. Elsewhere, we have the Russian warning on gas flow halt, which is a complication to risk. USD/JPY is recovering to 127.65 from 126.95, along with the recovery of equities.

Elsewhere, Euro and Sterling is up 0.15% against the USD. U.S Treasury Yields recovering with fornt end leading, so as major U.S. equity indexes.

North American session

The USD continued to make ground against European currencies through the US session, with GBP the worst performer, losing more than a big figure as the market started to factor in concerns about the UK economy. GBP probably also suffered from GBP/JPY flows, with GBP/JPY one of the most sensitive crosses to risk sentiment. USD/JPY however found support around 127.00 moving back to around 127.50, despite only a limited correction from the lows in UST yields and equities remaining under heavy pressure. 

GBP/USD fell below 1.26. EUR/USD was also softer, getting close to but not through the 1.0635 2020 lows, as EUR/GBP moved above .8450. Commodity currencies were significantly weaker as equities turned lower, AUD/USD below .7150 and USD/CAD above 1.28. 

While overall durable goods orders fell marginally short of consensus with a 0.8% March increase, more positive was a 1.1% increase ex transport, restoring a positive trend after February saw the first decline in 12 months, by 0.5% (revised from -0.6%). S March new home sales with a fall of 8.6% to 763k were close to consensus, the sharp decline due to February being revised up to 835k from 772k. April consumer confidence at 107.3 from 107.6 did not match the surprising bounce seen in the Michigan CSI. Brainard achieved the necessary support in the Senate to be confirmed as Fed Vice-Chair.


Data

01:30 GMT - AU: CPI (1Q) 5.1% A (Mkt: 4.6% Prev: 3.5%)


Data to come

06:00 GMT - DE: GFK Consumer Sentiment (May) (Mkt: -16 Prev: -15.5)

06:45 GMT - FR: INSEE Consumer Confidence (Apr) (Mkt: 92 Prev: 91)

12:30 GMT - US: Advance Goods Trade Balance (Mar) 4cast: -103.7Bn (Mkt: -105Bn Prev: -106.6Bn)

12:30 GMT - US: Wholesale Inventories (Mar P) (Mkt: 1.5% Prev: 2.5%)

14:00 GMT - US: Pending Home Sales (Mar) (Mkt: -1% Prev: -4.1%)

14:30 GMT - US: DOE U.S. crude oil inventory (Apr 22) (Mkt: -250K Prev: -8020K)

22:45 GMT - NZ: Trade Balance (Mar) (Prev: -385Mn)

23:50 GMT - JP: Industrial Production MoM (Mar P) (Mkt: 0.5% Prev: 2%)

23:50 GMT - JP: Industrial Production YoY (Mar P) (Mkt: -1.3% Prev: 0.5%)

23:50 GMT - JP: Retail Sales (Mar) (Mkt: 0.3% Prev: -0.8%)


Events

16:00 GMT – EU: ECB's Lagarde Speaks

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