Asia Summary and Highlights 28 June

Asia Session

Despite the emptiness from presidential debate, USD has been gaining since Hong Kong market opens and brought USD/JPY past the 161 figure. We heard another escalation in rhetoric from Suzuki as he said he is deeply concerned about excessive, one-sided moves on forex, there is little sign of an actual action. U.S. Treasury Yields are trading higher while JGB yields skids. Tokyo y/y headline CPI for June came in stronger than may at 2.3%, ex fresh food at 2.1% and ex fresh food & energy at 1.8%. The data remains supportive for BoJ to tighten but does not seem to spur any hawkish expectation. USD/JPY is trading 0.2% higher at 161.05.

Regional sentiment is outpacing U.S. three major equity indexes in the green while commodities are lower. However, king dollar remain in the driver seat and is leading the way within major pairs. AUD/USD fell 0.37% to 0.6622, NZD/USD also slipped 0.37% to 0.6060 while USD/CAD rose 0.21%. Else, EUR/USD is down 0.15% and GBP/USD down 0.13%.

North American session

US data was mixed but on balance on the weak side of expectations, despite a fall in 6k fall in initial claims and marginal upward revisions to Q1 GDP and core PCE prices. Weakness is visible in a wider advance goods trade deficit of $100.6bn from $98.0bn and core durable goods orders for May, with ex transport orders down by 0.1% while overall orders rose by 0.1%. Later Fed’s Bostic saw one rate cut this year but welcomed recent inflation data, while pending home sales fell by 2.1% in May.

UST yields fell and the USD saw some slippage, EUR/USD moving above 1.07 to 1.0725 before correcting to settle just above 1.07. However after a brief dip to 160.30 USD/JPY pushed back up to around 106.80. EUR/CHF was firm, advancing to .9620 but EUR/GBP gains faded. AUD/USD was marginally weaker near .6650 and USD/CAD was little changed after peaking at 1.37.