Asia Summary and Highlights 19 Jun

Asia Session

The May Australia unemployment rate is steady at 4.1% y/y. Headline employment change missed and dipped into negative territory of -2.5k. Participation rate is slightly off historic high at 67%.  The session's highlight is on potential U.S. strike over the weekend and see USD higher. AUD/USD is trading 0.33% lower at 0.6487, NZD/USD slipped more by 0.55% to 0.5995 while USD/CAD rise 0.12%.  So far the "leaks" from the U.S. side are back and forth but generally suggest the U.S. has plans to strike Iran's nuclear facility on Saturday and is waiting for Iran's response to potential talks. 

Japan is drafting plans to cut 20/30yr bond sales but increasing sales in short dated ones. It seems to be in reaction to adjust market concern on supply/demand and BoJ's decision to further cut bond purchase in 2026.  USD/JPY is trading 0.04% lower at 145.03 with 10yr JGB and U.S. Treasury yields both lower. Else ,EUR/USD is down 0.14% and GBP/USD is down 0.12%.

North American session

Ahead of the FOMC the USD saw a dip after Trump comments that Iran wanted to talk led to slippage in oil, but this was largely reversed. US data was soft, housing starts down by 9.8%, permits down by 2.0% and initial claims still high at 245k if down from 250k, but had little impact.  

The response to the FOMC meeting was modest. The USD initially slipped despite marginally higher median dots for 2026 and 2027 (2025 was unchanged) with the statement seeing uncertainty having diminished, while remaining elevated. However, Chairman Powell in his press conference sounded in no hurry to ease and this saw the USD move higher, EUR/USD falling to 1.1470, GBP/USD testing 1.34 and USD/JPY rising to 145.15. USD/CAD reached 1.37.