Asia Summary and Highlights 21 May

Asia Session

The April Japanese Trade balance disappoints as it arrives to be negative. While export is steady at 2% y/y, import contracts 2.2% y/y. It continues to point to less foreign buying after the stockpile in Q4 2024 and weak private demand in Japan. There is also a wave of haven bids on earlier reports that Israel is planning to attack Iran's nuclear facilities. 10yr JGB yields have passed 1.5% and see USD/JPY trading 0.54% lower at 143.72.

Regional equities are outperforming U.S. equities on Wednesday so far with the HSI and SSECI outperforming U.S. three major equity indexes. USD continues to trade broadly softer despite rising geopolitical tension. AUD/USD is trading 0.41% higher at 0.6450, NZD/USD is also trading 0.4% higher at 0.5949 while USD/CA slips 0.2%. The early volatility in oil has somewhat ease but still see oil up almost a dollar. Else, EUR/USD is up 0.42% and GBP/US is up 0.28%.

North American session

The USD saw some early gains but ended up slightly weaker in a session with little fresh news. The UST curve steepened and equities weakened. USD/JPY returned to 144.50 after rising to 145 while EUR/USD managed a marginal fresh high for the day at 1.1280. EUR/GBP was slightly higher but EUR/CHF moved lower as USD/CHF fell below .83 from .8350.  

The only significant data release was Canadian CPI. The headline slowed to 1.7% from 2.3% on the abolition of a carbon tax but the BoC’s core rates were the highest in over a year. USD/CAD slipped on the data to near 1.3920 and while that move was reversed later returned to near the lows. AUD/USD found support after touching below .64 and slippage in AUD/CAD on the data was reversed.