Asia Summary and Highlights 25 September

Asia Session

The Japan August services PPI has came in higher than expected at 2.7% y/y. It confirms wages are growing and in other words business margin will also be affected. U.S. Treasury Yields are performing individually while JGB yields slips. USD/JPY is trading 0.03% higher at 143.25.

The Australian August monthly has came in lower than expected at CPI 2.7% y/y, from 3.5% in July and finally in range of RBA's target. However, most of the moderation comes from government energy rebate and trimmed mean remain above target range at 3.4% y/y. It shows that there are still way to go before a RBA easing. The People’s Bank of China cut the Medium-term Lending Facility (MLF) rate to 2% from 2.3% . It supported the regional equity market and see both the Chinese and HK indexes up close to 2%, while U.S. three major equity indexes are slightly in the red. AUD/USD continued the post CPI slip by 0.12% to 0.6884, while NZD/USD is down 0.1% and USD/CAD unchanged. Else, EUR/USD is up 0.15% and GBP/USD is up 0.03%.

North American session

The USD took a hit from softer US consumer confidence data, September seeing a decline to 98.7 from 105.6, with eyes in particular on weaker labor market perceptions. USD/JPY fell to 143.25 from near 144 while EUR/USD rose to 1.1175 from 1.1140.  EUR/JPY, having peaked near 161, fell back to near 160.  

The commodity currencies were supported by gains in oil as well as the US data, USD/CAD falling to 1.3440 from 1.35 and AUD/USD advancing to .6890 from .6850. BoC’s Macklem said further rate cuts were likely but timing and pace was dependent on data