Asia Summary and Highlights 7 October

Asia Session

USD/JPY rose above 149 in early Asia to 149.12 as follow through momentum of stronger NFP pushes the pair higher. The USD/JPY has gained significantly since the end of September and seems to have drawn the attention to the Japanese officials and we are hearing some verbal intervention on Monday's Asia session. USD/JPY is trading 0.06% lower at 148.56 as JGB yields are outperforming U.S. Treasury Yields.

The Australian private inflation survey for September came in at 0.1% m/m versus -0.1% prior. It doesn't change the broader Australian inflation picture where gradual moderation is expected. Regional sentiment remains vibrant and is supporting the Aussie. AUD/USD is trading 0.1% higher at 0.6800, NZD/USD is up 0.02% at 0.6159 while USD/CAD rose 0.11% as oil slips half a dollar. Else, EUR/USD is down 0.07% after closing the small opening gap once and GBP/USD is down 0.11%.

North American session

September’s non-farm payroll was significantly stronger than expected, with a 254k increase, an above trend 0.4% increase in average hourly earnings and a fall in unemployment to 4.1% from 4.2%. This saw the USD rise sharply as bets on a 50bps November FOMC easing were taken off. Most of the action came in the knee-jerk response to the data.

USD/JPY saw the biggest response, extending gains to touch 149 in the afternoon after trading near 146.50 before the data. EUR/USD fell to near 1.0950 from 1.1030 before a modest correction. GBP/USD saw a more significant correction off its lows (below 1.31) than most, leaving GBP/USD near Asian levels around 1.3130, while EUR/GBP slipped to .8360. EUR/CHF was in contrast slightly higher at .9420. AUD/USD fell to .68 from .6840. USD/CAD gains from 1.3550 were relatively modest, with 1.36 not tested. AUD/CAD fell to .9220 from .9275.