Asia Summary and Highlights 5 May
The RBA March meeting hike rates to 4.35% on a 8-1 vote
Asia Session
After U.S. announced Project Freedom. Iran categorized such as act of hostile and warned ships to not follow. It is later reported that Two US Navy destroyers, the USS Truxtun and USS Mason, successfully transited the Strait of Hormuz even until the barrage of Iranian fire. While it demonstrates U.S. capacity, it also suggest Iran will not yield and let ship pass peacefully. USD/JPY is trading 0.02% higher at 157.24.
As per forecast, the RBA increased cash rate to 4.35%. It is of majority vote instead of a spilt decision in Q1 2025. Obviously, the energy shock continue to contributes toward an above target range CPI with little sign of slowing yet. The RBA seems to be comfortable after three consecutive hike and looks done for now in their forward guidance. AUD/USD is trading 0.25% lower at 0.7149. NZD/USD is trading 0.2% lower while USD/CAD rises 0.02% with oil lower. Else, EUR/USD is down 0.06% and GBP/USD is down 0.1%.
European and North American sessions
Tensions escalated in the Middle East as the US Project Freedom to protect navigation through the Strait of Hormuz meeting Iranian resistance, with Iran striking a South Korean ship and targets in the UAE, and the US claiming to have sunk several Iranian boats. This saw stocks slipping and the USD stronger. USD/JPY, having slipped below 156 in Asia, returned to near 157, while EUR/USD slipped to 1.17 from 1.1720. EUR/GBP and EUR/CHF made only marginal gains. USD/CAD rose to 1.3610 from 1.359o and AUD/USD fell to .7170 from .72.
A 1.5% rise in March US factory orders was stronger than expected with non-durables inflated by higher energy prices. Comments from Fed’s Williams were moderate, suggesting no eagerness to tighten.