Asia Summary and Highlights 29 Sep

Asia Session

The USD headed to a soft start with Trump thinking of more chip tariffs. While it is generally regard as a part of his trade tactic, it still create a certain level of uncertainty in the market. From the Japan side, we heard Japan leadership contender Takaichi hint that she may renegotiate trade deal with the US. It is obviously a vote move as she is tilted towards more easing and this move seems to be trying to benefit from nationalism voters' favor. USD/JPY is trading 0.45% lower at 148.0 with both the U.S. Treasury and JGB yields lower.

The broad risk space is looking at a vibrant start. We have Trump and Netanyahu nearing a Gaza peace agreement but Hamas has been the sticky part. From the trade front, it is reported Xi would like a policy shift on Taiwan from Trump to facilitate a swift trade deal. Hong Kong equities are leading the gains with U.S. and Chinese equities performing similarly while Japanese equities lag. AUD/USD is trading 0.35% higher at 0.6569, NZD/USD is trading 0.25% higher at 0.5789 while USD/CAD slips 0.16%. Else, EUR/USD is up 0.26% and GBP/USD is up 0.24%.

North American session

The USD softened with US data, though without any major shocks, easing inflation worries somewhat. While August personal income with a rise of 0.4% and personal spending at 0.6% were above expectations core PCE prices were in line at a moderate 0.2%. The Final September Michigan CSI was revised marginally lower to 55.1 from 55.4 with the 5-10 year inflation expectation at 3.7% from 3.9%. 

USD/JPY slipped to 149.50 after peaking just below 150 while EUR/USD nudged above 1.07 from 1.1660. GBP/USD outperformed, moving above 1.34 from 1.3350 as EUR/GBP slipped to .8730 from .8740. AUD/USD rose to .6550 from .6525 but USD/CAD saw only marginal losses to 1.3940 as AUD/CAD rose to .9125 from .91, despite a stronger than expected 0.2% increase in July Canadian GDP.