Highlights January 06, 2023 / 05:26 am UTC

Asia Summary and Highlights 6 Jan

By Cephas Kin Long Yung

Asia Session

The latest Japan November labor cash earning is 0.5% y/y. However, when considering real wage, it is at -3.8% y/y, which is the weakest since May 2014. The weak real wage is going to weigh on Japanese consumption and subsequent growth. USD/JPY is higher for the session at 133.90 from 133.27. U.S. Treasury Yields are slightly higher for the session

The antipodeans continue to gain on potentail relaxation of "three red lines" for the Chinese property developers. AUD/USD is trading 0.1% higher at 0.6758 while the NZD/USD is up 0.17% at 0.6235. USD/CAD is close to unchanged for the session.

Elsewhere, EUR/USD is down 0.04% and GBP/USD is unchanged.

North American session

The USD surged in the US session on the back of a stronger than expected ADP number and an unexpected decline in initial claims. A hawkish tone from Fed’s George and Bostic added fuel to the move. December’s ADP private sector employment rise of 235k was well above expectations. It is unclear whether this is a correction from recent ADP underperformance of if ADP underperformance will continue in December. If so payrolls would come in strong. Initial claims data also suggested a tight labor market though data in the holiday period should be treated cautiously with seasonal adjustments difficult. Initial claims fell to 204k from 223k and continued claims fell to 1694k from 1718k. Both were surveyed after the non-farm payroll.

The riskier currencies suffered the most, with AUD/USD losing around 1.5%, EUR/USD and GBP/USD losing a big figure, while USD/JPY rise only around 0.5%. The USD saw a modest correction off its highs in the afternoon assisted by a less hawkish tone from the usually hawkish Fed’s Bullard though even this modest correction faded into he close.


Data


00:30 GMT - JP: Composite PMI (Dec F) 49.7 (Prev: 50.0)


00:30 GMT - JP: Services PMI (Dec F) 51.1 (Prev: 51.7)


Data to come


07:00 GMT - DE: Factory Orders (wda) YoY (Nov) (Mkt: -5.8% Prev: -3.2%)


07:00 GMT - DE: Factory Orders MoM (Nov) (Mkt: -0.5% Prev: 0.8%)


07:00 GMT - DE: Retail Sales MoM (Nov) (Mkt: 1.5% Prev: -2.8%)


07:00 GMT - NO: Industrial Production MoM (Nov) (Prev: -1.2%)


07:00 GMT - NO: Industrial Production, Manufacturing MoM (Nov) (Prev: 0.3%)


09:30 GMT - UK: Construction PMI (Dec) (Prev: 50.4)


10:00 GMT - EU: HICP Core YoY (Dec P) (Mkt: 5.1% Prev: 5.0%)


10:00 GMT - EU: Economic Confidence (Dec) (Mkt: 94.5 Prev: 93.7)


10:00 GMT - EU: Retail Sales MoM (Nov) (Mkt: 0.5% Prev: -1.8%)


10:00 GMT - EU: Retail Sales YoY (Nov) (Mkt: -3.1% Prev: -2.7%)


10:00 GMT - EU: HICP Estimate YoY (Dec) (Mkt: 9.5% Prev: 10.1%)


13:30 GMT - CA: Employment Change (Dec) (Mkt: 5.0K Prev: 10.1K)


13:30 GMT - CA: Unemployment (Nov) (Mkt: 5.2% Prev: 5.1%)


13:30 GMT - US: Private Payrolls (Dec) 4cast: 170K (Mkt: 183K Prev: 221K)


13:30 GMT - US: Non-farm Payrolls (Dec) 4cast: 200K (Mkt: 200K Prev: 263K)


13:30 GMT - US: Average Hourly Earnings MoM (Dec) 4cast: 0.3% (Mkt: 0.4% Prev: 0.6%)


13:30 GMT - US: Unemployment Rate (Dec) 4cast: 3.7% (Mkt: 3.7 Prev: 3.7)


13:30 GMT - US: Underemployment (Dec) (Prev: 6.7%)


15:00 GMT - CA: Ivey PMI (Dec) (Prev: 51.4)


15:00 GMT - US: Durable Goods Orders (Nov F) (Mkt: -2.1% Prev: -2.1%)


15:00 GMT - US: ISM Services (Dec) 4cast: 56 (Mkt: 55.0 Prev: 56.5)


15:00 GMT - US: Factory Orders (Nov) (Mkt: -1.0% Prev: 1.0%)


15:00 GMT - US: Durables Ex Transportation (Nov F) (Prev: 0.2%)

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I, Cephas Kin Long Yung, the lead analyst declare that the views expressed herein are mine and are clear, fair and not misleading at the time of publication. They have not been influenced by any relationship, either a personal relationship of mine or a relationship of the firm, to any entity described or referred to herein nor to any client of Continuum Economics nor has any inducement been received in relation to those views. I further declare that in the preparation and publication of this report I have at all times followed all relevant Continuum Economics compliance protocols including those reasonably seeking to prevent the receipt or misuse of material non-public information.