Asia Summary and Highlights 16 August

RBNZ's Assistant Governor Silk says the Bank is taking a measured approach to rate cuts with NZ Q2 PPI Beats
Asia Session
The Q2 New Zealand PPI has beaten estimate in both input and output category. Both rose above 1% when they are expected to further moderate. Such may be a speed bump in RBNZ's plan of easing all the way till 2026 to 3%. The broad risk mood is positive with regional equity indexes in Japan and Hong Kong outperforming. NZD/USD is trading 0.45% higher at 0.6011, AUD/USD also 0.2% higher while USD/CAD slips 0.03%.
USD is trading broadly softer against majors on Friday. U.S. Treasury yields are lower across the curve while JGB yields rose, seems to be supporting the JPY so far. USD/JPY is trading 0.27% lower at 148.87. Else, EUR/USD is up 0.08% and GBP/USD is up 0.14%.
North American session
The USD bounced sharply on stronger than expected US July retail sales data which saw a 1.0% gain overall, with 0.4% gains ex autos and ex autos and gasoline, as well as a lower than expected weekly initial claims outcome of 227k from 234k, easing fears of a slowing in the US economy.
USD/JPY bounced to a high of 149.32 from 147.25 and saw no significant correction, settling near 149. The riskier currencies however fully reversed their initial dips before seeing modest late slippage, GBP/USD rebounding from a low of 1.28 back above 1.2850. Late USD/CAD gains saw it back near its post-data high of 1.3738 from pre-data levels around 1.37. EUR/USD slipped to a low of 1.0950 from above 1.01, before ending in mid-range near 1.0975, the EUR slipping versus the GBP but stronger versus the CHF.
Other US data was quite soft, but had little impact. Moderately negative manufacturing surveys from the Philly Fed and Empire State accompanied the retail sales and initial claims releases, followed by a 0.6% fall in July industrial production, though this was fully due to a sharp dip in autos and temporary weakness due to Hurricane Beryl. August’s NAHB homebuilders’ index slipped to 39 from 42, but 6-month expectations were firmer. Fed’s Musalem denied the Fed was behind the curve, stating data did not suggest recession.