Asia Summary and Highlights 26 May

Asia Session

U.S. equities are gaining on Monday after Trump Delay EU Tariffs Till July 9. The headline crossed the wire over the weekend after Trump spoke with European Commission President Ursula von der Leyen. Regional equities in Hong Kong and China seems to be affected by stronger Yuan and drift into the red. AUD/USD is trading 0.36% higher at 0.6518, NZD/USD outperforms to trade 0.52% higher at 0.6017 while USD/CAD slipped 0.18%.

Over the weekend. Japan PM Ishiba says he is aiming for a trade deal with U.S. by mid-June with discussion to be done during the G7 summit. There seems to be progress over the past week when we see constructive headlines from the Japan side more often.  USD/JY opened lower but quickly closed the gap to trade 0.12% higher at 142.73 as JGB yields fell. Else, EUR/USD is up 0.38% and GBP/USD up 0.24%. Major currencies opened a few pips away from Friday's close but has since see USD trading broadly weaker.

North American session

Comments from Trump threatening 50% tariffs on the EU from June 1 and 25% tariffs on imported iPhones alarmed markets though a dip in UST yields was largely reversed and equity losses were modest, with many doubting whether any such tariffs would last long if implemented. EUR/USD slipped from 1.1375 to 1.13 before reversing most of its losses. USD/JPY slipped to 142.50 from 143.40 and was subsequently fairly stable. The USD was weak elsewhere with AUD//USD testing .65, USD/CAD falling a big figure to 1.3720. EUR/GBP saw only marginal losses but EUR/CHF fell to .9330 from .9370. 

March Canadian retail sales rise by 0.8% but fell by 0.7% ex autos. US April new home sales saw a strong 10.9% increase to 743k. Fed’s Goolsbee stated that the bar to move rates was high.