Asia Summary and Highlights 5 June

Asia Session

After a disappointing March wage data, the April Labor Cash Earning is seeing a growth of more than 2% after historic negotiation results and would be loved by the BoJ to support their next step in entering positive rates. Ueda has mentioned in previous interviews that a 2% wage growth would feed enough into trend inflation to achieve BoJ's inflation target. If we continue to see above 2% wage hikes, there would be a higher chance for the BoJ to hike rates. U.S. Treasury Yields are higher across the curve while 10yr JGB  yields fell below 1%. USD/JPY is trading 0.37% higher at 155.41.

As previewed from Tuesday's slate of Australian economic release, the Q1 GDP has missed by 0.1% q/q. While it is a soft release, few has been expecting any RBA hikes and thus the market impact is muted. On the other hand, Chinese CAIXIN Service PMI beats estimates after a disappointing manufacturing PMI. Regional sentiment is mixed while U.S. major equity indexes are in the green. AUD/USD is trading 0.14% higher at 0.6659, NZD/USD is also 0.11% higher at 0.6184 while USD/CAD is unchanged at 1.3675. Else, EUR/USD is unchanged and GBP/USD up 0.02%.

North American session

The USD was generally slightly softer in North America, assisted by JOLTS data showing US job openings down by 296k to 8.059m in April. USD/JPY extended European losses to a low of 154.55 before correcting to 154.75 though AUD and CAD largely sustained European losses. 

EUR/USD saw a modest recovery to 1.0880 from 1.0860. GBP/USD rose to near 1.28 after touching below 1.2750, before slipping back to 1.2775 leaving EUR/GBP little changed. EUR/CHF extended losses to .9680. EUR/NOK sustained European gains while EUR/SEK saw a partial correction from its European highs.