Asia Summary and Highlights 15 Aug

Asia Session

The Japan preliminary Q2 GDP came in stronger at +0.3% q/q, with private consumption slightly better than forecast and stronger business spending. It would be a welcoming news for the BoJ as it proves certain nominal wage growth has stimulated private consumption. However, with real wage remain negative, we are vigilant on an imminently solid recovery in consumption. USD/JPY is trading 0.41% lower at 147.14 as JGB yields outperform U.S. Treasury yields.

The broad risk sentiment is performing individually with the HSI lagging and U.S. major equity indexes all in the green. The USD has retraced partial Thursday gains. The slate of Chinese data are also mixed. AUD/USD is trading 0.09% higher at 0.6501, NZD/USD is trading 0.04% higher at 0.5920 while USD/CAD slides 0.1%. Else, EUR/USD and GBP/USD is up 0.13%.

North American session

US PPI shocked sharply on the upside, with gains of 0.9% overall and ex food and energy, while initial claims fell to 224k from 227k. Fed’s Daly and Musalem argued against a 50bps easing in September, while Bostic saw positive signals from the consumer. With the PPI shock the main story, UST yields and the USD advanced, extending initial gains into the afternoon before a marginal late correction.  

USD/JPY rallied to 147.80 from 146.50 as EUR/JPY rebounded above 172 from 171. EUR/USD fell to 1.1650 from 1.1685 with EUR/GBP sustaining its European losses as GBP/USD fell to 1.3540 from 1.3580. USD/CAD moved above 1.38 and AUD/USD fell to .65 with AUD/CAD slightly softer near .8970.