Asia Summary and Highlights 30 January

Asia Session

On Thursday, the tariff man has made no new headline and see the broader market calmer than earlier in the week. Major equity indexes are in the green while some Asian market are out to observe the lunar new year. AUD/USD is down 0.13% at 0.6224, NZD/USD is also down 0.17% to 0.5678 while USD/CAD is unchanged.

While China, Hong Kong and Singapore markets are observing their holiday, JPY is finding a bid in the Asia session. JGB are leading U.S. Treasury Yields in the opening and stayed strong. The broad risk sentiment remains calm after the turmoil earlier in the week. USD/JPY is down 0.36% to 154.63. Else, EUR/USD is down 0.02% and GBP/USD is down 0.04%.

North American session

The USD weakened after a sharply wider advance goods trade deficit in December, coupled with declines in retail and wholesale inventories, raised downside risk for the forthcoming Q4 GDP release. USD/JPY saw a brief dip below 155 while EUR/USD moved above 1.04. USD/CAD however was little changed near 1.4450 after the BoC eased by 25bps as expected, announced the ending of QT and dropped forward guidance given uncertainty over tariffs. A dip to 1.4410 came after Commerce Secretary nominee Lutnick said Canada and Mexico could avoid tariffs if they acted on migrants and drugs. 

The FOMC left rates unchanged as expected. The USD initially bounced, USD/JPY to 155.50 and EUR/USD falling back below 1.04, as the statement dropped a reference to making progress on inflation. However, when asked about this at the press conference Chairman Powell downplayed this change, stating he still expected progress on inflation. The USD then returned to near where it was before the decision.