Asia Summary and Highlights 3 March

Asia Session

The optimism in the risk space did not last after it was seen opening higher on follow through from Friday and crypto market friendly remark from Trump over the weekend. The opening gap in U.S. major equity indexes has been closed once and tried to search for lower grounds while yields are still higher after partial reversal. USD/JPY is trading 0.12% lower at 150.42 after a session high of 151.02.

The overall risk sentiment is choppy on Monday as the opening optimism has generally faded but market participants seems to be refraining themselves to be too bearish before the all important U.S. tariff decision on Tuesday. China says its studying countermeasures in response to Trump's March 4 tariffs but with little follow up on details. USD is trading broadly lower against major and does not seem to be following the partial risk reversal. AUD/USD is up 0.2% to 0.6221, NZD/USD is up 0.09% while USD/CAD slipped 0.16%. Else, EUR/USD is up 0.41% after opening higher at 1.0402 from 1.0373's Friday close and GBP/USD is up 0.2%.

North American session

US core PCE prices were as expected with a moderate 0.3% increase. There were some surprises in the other US releases, a 0.2% fall in consumer spending but a 0.9% rise in personal income, and a massive jump in the advance goods trade deficit to $153.3bn from $122.1bn as imports surged ahead of threatened tariffs. There was little immediate reaction to the US data, though the trade and spending data turned the Atlanta Fed’Q1 GDP estimate negative. A stronger than expected 2.6% annualized increase in Q4 Canadian GDP saw USD/CAD slipping to test 1.44, a move that was not sustained.  

The USD later advanced as a meeting between Trump and Ukraine’s Zelenskiy turned into a confrontation, with the exception of a relatively stable USD/JPY. EUR/USD led the way, falling well below 1.04. AUD/USD fell below .62 and USD/CAD moved above 1.4450.