Asia Summary and Highlights 30 Jan
Metal Corrects
Asia Session
The Tokyo headline CPI dips below 2% while the other two item also slips to 2%. Regardless of BoJ's hawkish rhetoric, the data eases pressure for them to perform any imminent hike. While energy subsidy is in play, the fact that core-core inflation also moderates to 2% shows that the inflationary pressure is luke warm at best as real wage remain choppy for the past quarters. USD/JPY is trading 0.61% higher at 154 with U.S. Treasury Yields outperform JGB counterpart.
Gold continue its choppy correction. The up and down movement has seen Gold chopped to the downside, down more than a 150 USD per oz. Major equity indexes are all in the red, further dragging the bid on risk currencies like the Antipodeans. AUD/USD is down 0.73% to 0.6999. NZD/USD is also trading 0.54% lower while USD/CAD rises 0.22%. Else, both EUR/USD and GBP/USD are down 0.43%.
North American session
The USD was little changed overall but saw some volatility as equities fell sharply after the open, led by Microsoft. While this sent UST yields lower, it gave the USD a lift, EUR/USD falling to near 1.19 from 1.1970 before finding support. The bounce in USD/JPY was however brief and stalled just short of an earlier high of 153.54 before falling sharply to a low of 152.68. Equities came off their lows and EUR/USD gradually erased most of its slide while USD/JPY moved back above 153. EUR/GBP was marginally firmer but EUR/CHF fell to .9160 from .9180. USD/CAD was softer near 1.35 with AUD/CAD falling to .95 from .9550.
US data had a limited impact but was on the weak side, November’s trade deficit of $56.8bn more than fully reversing a sharp fall to $29.2bn in October, while initial claims at 209k were higher than expected, if down from 210k in the previous week which was revised up from 200k. Oil prices were firm as risk of a US strike on Iran persisted.