Asia Summary and Highlights 9 Jul
RBNZ hold as expected
Nissan halts production of three models for Canada at two US plants due to tariffs
Asia Session
The RBNZ has kept rates unchanged at 3.25% as widely expected. Their OCR path forecast only sees one more 25bps hike and they have not changed that forecast. They are also seeing CPI to edge closer to upper band of target range for the rest of the year, a reason for their temporary pause. NZD/USD is trading 0.31% lower at 0.5979, AUD/USD is down 0.15% to 0.6517 while USD/CAD rise 0.19%.
Blood was drawn as Nikkei reported that Nissan halts production of three models for Canada at two US plants due to tariffs. The impact of tariffs are starting to bit, especially for the Japanese auto industry, as there has been little progress of a trade agreement before the U.S. and Japan. Unless either side compromise on the critical auto tariffs, there is unlikely to be a quick deal. USD/JPY is trading 0.4% higher at 147.11. Else, EUR/USD and GBP/USD is down 0.18%.
North American session
The USD strengthened in the North American morning with UST yields rising and equities quiet. There was little data, apart from a marginally softer NFIB small business survey where the price index increased. Trump said there would be no extensions to the August 1 tariff deadline.
The USD came of its highs in the afternoon, while remaining up on the day. EUR/USD found support below 1.17, and recovered to 1.1725. with Trump stating that the US was probably two days off sending the EU a letter on tariffs, and that the EU had recently been “nice”. Trump also stated he would tariff copper at 50%. USD/JPY peaked just below 147 and corrected to 146.70. GBP/USD recovered to near 1.36 after falling to 1.3525. AUD/USD held above pre-RBA levels. EUR/JPY reached 172.