Asia Summary and Highlights 26 Jan
Gold broke through the big figure 5000 and continue to run higher
Asia Session
Following Friday's momentum, we are seeing more JPY bids at the opening bell. The key trigger from Friday was rumors of a Fed rate check, the next leg over the weekend was Takaichi's warning that authorities are ready to combat speculative behavior. USD/JPY opened a figure lower than Friday's close at 154.63. Back and forth early trading finally gave in to search for lower grounds, seeing USD/JPY lower by 1.08% to 154.06.
After another shooting in Minnesota, the political environment significantly worsens with Democrats threatens to block funding bill and some Republicans break rank to call out Trump for response. Regardless, USD has been sold off hard to start the week and we see major FX pairs open in favor of any USD counterparts. Gold broke through $5000/oz with haven bids and also benefiting from weak USD. AUD/USD is still trading 0.24% higher at 0.6912 despite coming lower from the opening gap. NZD/USD is also trading 0.21% higher while USD/CAD slips 0.18%. Else, EUR/USD is up 0.33% (gap still unclosed) and GBP/USD up 0.17% (gap once closed).
North American session
The USD moved lower throughout the session. Through most of the morning USD/JPY was fairly stable a little above 158, but then tuned sharply lower, spurred by talk of a rate check, plunging below 156 in the afternoon. EUR/USD gains paused near 1.18 but once the level was broken bounced to 1.1825, GBP/USD rose to 1.3635 as EUR/GBP marginally extended European losses. EUR/CHF, stable in Europe, fell to .9240 from .9280. USD/CAD fell to 1.37 while AUD/USD gains came close to .69. Moves in equities and USTs were modest but oil saw significant gains.
US data had little impact with January S and P PMIs almost unchanged from December. January’s Michigan CSI was revised up to 56.4 from 54.0, with inflation expectations revised slightly lower.