Asia Summary and Highlights 8 June
Iran says that Israeli strikes have damaged its Karoon Petrochemical complex
Japan Q1 annualized GDP 1.8%
Asia Session
The second read of Japan Q1 annualized GDP shows a revision lower at 1.8%, from 2.1%. While it is a revision lower, the figure remains healthy as we see private consumption data unchanged. Nevertheless, market participants' focus would rather be on intervention threat as USD/JPY broke 160 figure and looks set for higher rounds with haven USD bids. We do not see an imminent intervention but could not rule out one if the rally within this week past another one or two figure. USD/JPY is trading 0.02% higher at 160.30 after opening a few pips lower.
More crossfire is reported after Trump ask Netanyahu to restrain from attacking. Iran says that Israeli strikes have damaged its Karoon Petrochemical complex while the West Bank and Central Israel are being targeted. It doesn't look like a deal is close with missiles flying around but U.S. equities are taking a breather after Friday's slaughter while regional equities face a bloodbath. AUD/USD opened lower but managed to close the gap. Yet, it reverted 0.02% lower at 0.7044. NZD/USD is trading 0.12% higher while USD/CAD is unchanged despite oil jumping by more than 4 USD/b. Else, EUR/USD is up 0.08% and GBP/USD unchanged . Major currency pairs have at least once cloesd their opening gap.
North American session
May’s US non-farm payroll was significantly stronger than expected with a rise of 172k, with 93k in upward back month revisions. May’s upside surprise came from a 55k rise in local government and a 70k rise in leisure and hospitality, possibly in preparation for the World Cup. Unchanged unemployment of 4.3% and a 0.3% rise in average hourly earnings were as expected, though also suggesting a healthy labor market. Increased risk of Fed tightening lifted UST yields and saw equities lower, despite oil being down on the day.
USD/JPY bounced above 160 peaking at 160.33 before correcting below 160.20. EUR/USD plunged to 1.1525 from 1.1645. EUR/JPY fell to near 185 from above 186 but EUR/GBP and EUR/CHF moves were modest. USD/CAD focused more on the US data, rising to 1.3950 from 1.3880 but AUD/CAD fell to .9825 from .99 as AUD/USD fell almost a big figure below .7050.