Asia Summary and Highlights 8 Apr

Asia Session

Labor cash earning for Japan in February arrived at 1.8% y/y, slightly lower than 2% in January but it is well before the strong negotiation results in March and closer to the 2% target. It is a positive sign and supports BoJ's decision to change monetary policy as wage growth should accelerated further after March. However, on Monday Asia session, the theme is potential cease fire between Israel and Hamas and strong gains for metal. With U.S. Treasury Yields higher across the curve, USD/JPY continues to hang around recent high at 151.77, 0.11% higher for the session.

Metals are performing strongly on Monday Asia with gold refreshing new high and Shanghai silver futures hitting limit up. However, despite a potential easing of geopolitical tension, regional sentiment is soft and U.S. major equity indexes have closed any gap higher. The push and pull balanced out each other and see AUD/USD slipping 1 pip to 0.6578, NZD/USD also down 1 pip to 0.6012 while USD/CAD rose 0.09% to 1.3601 as oil stay depressed after opening lower on hopes of ceasefire. Else, EUR/USD is down 0.04% and GBP/USD is down 0.07%. 

North American session

The US employment report was stronger than expected with a rise of 303k, with positive detail, as unemployment fell to 3.8% from 3.9% due to employment outpacing a strong rise in the labor force, a rise in the workweek and a 0.3% rise in average hourly earnings that was rounded down. The USD bounced, EUR/USD falling below 1.08 from near 1.0850, and USD/JPY rising to 151.75 from near 151.30.  

However as the session continued the USD gains faded, despite Fed speakers Barkin, Logan and Bowman all sounding quite hawkish, either noting strong data or warning against near term easing. EUR/USD, GBP/USD and AUD/USD all ended up back near pre-data levels as equities advanced. USD/JPY remained above pre-data levels, near 151.60, with UST yields remaining higher.

Canada’s employment report with a 2.2k decline and rise in unemployment to 6.1% from 5.8% was weaker than expected. USD/CAD bounced to near 1.3650 from 1.3560 after the data before slipping back to near 1.3590, still above pre-data levels.