Asia Summary and Highlights 21 Apr
NZ Q1 CPI Overshoot before energy shock
Japan FM says closely monitoring financial markets, will take measure if needed
Asia Session
The NZ Q1 CPI came in at 3.1% y/y, overshooting RBNZ's target band as expected. More importantly, the overshoot happened before the energy shock, which led to market participants believe Q2 will be even higher and force the RBNZ to turn hawkish. NZD/USD jumped higher and is still trading 0.39% higher at 0.5913. AUD/USD is trading 0.09% lower while USD/CAD is unchanged. Both Brent and WTI are slightly lower for the session.
Japan FM says she is closely monitoring financial markets and will take measure if needed. Classic jawboning from the Japanese ministers as USD/JPY approaches 160. It doesn't mean we are seeing intervention immediately at 160 but the FM letting market know of their presence. USD/JPY is trading 0.1% higher at 158.96. The broader risk sentiment is showing signs of life. Else, EUR/USD and GBP/USD are down 0.06%.
European and North American sessions
The USD saw a correction from its Asian bounce as traders awaited further news from the Middle East where tensions had increased over the weekend, with Senate hearings for Fed Chair nominee Warsh also awaited on Tuesday. USD/JPY was little changed near 159.80 but off its lows, but EUR/USD moved up to 1.1790 from 1.1750. Despite pressure on UK PM Starmer EUR/GBP was little changed near .8705, but EUR/CHF was weaker at .9170 from .92.
There was no significant US data but March Canadian CPI at 2.5% yr/yr from 1.8% was softer than expected. Despite this USD/CAD fell to 1.3650 from 1.37. Later the Bank of Canada’s Q1 Business Outlook survey was more positive, if probably not fully catching the impact of the war. AUD/CAD was little changed near .9790, with AUD/USD rising to .7180 from .7150.