Asia Summary and Highlights 19 May
Japan Q1 GDP Beats
Asia Session
Japan Q1 GDP beats estimate at 2.1% annualized. While it is supportive with private consumption rising slightly above estimate at 0.3%, so as CAPEX, the picture for Q2 contrast starkly. Energy shock is going to be a huge issue for economic growth in Q2 but should be partially shielded by stimulus for now. USD/JPY is trading 0.09% higher at 158.92 as JGB yields once again take off.
Trump is still doing his rounds of talks regard the geopolitical front. In late NA session, he mentioned an attack was called off due to the asking of UAE and Saudi leaders. Then, he goes on saying there is "good chance of Iran deal after Gulf states secure attack pause". Market is so far ignoring him and see major equity indexes lower with Hong Kong and Chinese equities outperforming. AUD/USD is trading 0.45% lower at 0.7136. NZD/USD is trading 0.33% lower at 0.5855 while USD/CAD rises 0.07% as both Brent and WTI slightly higher. Else, EUR/USD is down 0.12% and GBP/USD down 0.14%.
North American session
The USD gyrated on conflicting headlines over Trump’s intentions towards Iran. Early losses were seen on talk that Trump might allow a temporary waiver of sanctions on Iran before a recovery as Trump said he was not open to offering Iran concessions. A late slide came as Trump stated he was persuaded by Qatar, Saudi Arabia and the UAE not to launch an attack on Iran scheduled for tomorrow, though he has instructed the military to be prepared to launch such an attack if a deal is not reached.
Trump’s late comments means that a USD/JPY move above 159 was not sustained. EUR/USD was marginally firmer around 1.1650. EUR/GBP extended losses to .8680 from .87 as GBP/USD moved above 1.34. Movements in AUD/USD and USD/CAD were modest.
May’s NAHB Homebuilders’ index was stronger than expected, rebounding to 37 from April’s weaker 34.