Asia Summary and Highlights 24 June
Australian May Headline CPI 4% y/y
BOJ's June Summary of Opinions confirmed a board majority hawkish
Asia Session
Risk stays choppy with traffic began to flow in the Strait of Hormuz. The market is clearly waiting for the next cue with the initial euphoria in Middle East peace and Spacex IPO fades. Major equity indexes are performing individually. The May monthly headline CPI continues to moderate at 4% y/y. However, trimmed mean CPI, favored by RBA, beats estimate at 3.6% y/y. AUD/USD is trading 0.06% lower at 0.6912 on soft precious metal. NZD/USD is trading 0.22% lower while USD/CAD rises 0.04%. Both brent and WTI is lower for the session.
USD/JPY is consolidating at recent high around mid 161. The June BoJ summary of opinions confirmed that majority of board members are indeed hawkish. But contrary to market thinking, we believe the political obstacle will be too big for a hike every few months and see only another hike after 2027 spring wage negotiation. USD/JPY is almost unchanged at 161.58. Else, EUR/USD is down 0.11% and GBP/USD is down 0.06%.
North American session
The USD continued to strengthen. With equities under pressure the JPY was resilient, with USD/JPY remaining close to 161.50, while AUD/USD was particularly weak, falling to .6910. Despite losses in AUD/CAD, USD/CAD pushed above 1.42. EUR/USD fell below 1.14 to 1.1380, while GBP/USD saw lows below 1.32. EUR/GBP was little changed but EUR/CHF slightly weaker. BoE’s Taylor advocated an extended hold in policy. June US S and P PMIs were stronger, manufacturing at 55.7 from 55.1 and services at 51.3 from 50.7.