Asia Summary and Highlights 13 Feb

Asia Session

The RBNZ inflation expectation has been revised lower. 1yr expectation is lowered to 3.22% from 3.6% and 2yr to 2.5% from 2.76%. It is not surprising given the current inflation dynamics but seems to have smashed hawkish speculations sparked by ANZ last week. NZD/USD dropped 0.38% to 0.6106, AUD/USD also 0.2% lower at 0.6517 while USD/CAD rose 0.06%.

It was reported that Houthi militants had launched two missiles from Yemen towards commercial vessels in the Red Sea. There has been minimal damage but continue to highlight the geopolitical uncertainty in the area. U.S. Treasury Yields are lower in front and close to unchanged at the back while JGB yields also reopened little changed. The broad risk sentiment remains indecisive before the all important U.S. CPI. USD/JPY is 0.14% higher at 149.55. Elsewhere, EUR/USD is down 0.05% and GBP/USD is down 0.09%. 

North American session

The USD fell back against the riskier currencies through the North American morning, as equities continued to power ahead despite a lack of news though much of this was reversed in the afternoon as equity gains reversed. EUR/USD gained around 15 pips to 1.0785 before correcting, while AUD rising 20 pips to peak above 0.6540, and USD/CAD fell 30 pips to a low of 1.3430. The CHF and particularly the JPY underperformed, with USD/JPY rising half a figure to test 149.50 before finding support at 149.25.