Asia Summary and Highlights 14 April

Asia Session

The U.S. equity indexes are opening higher for the week as risk sentiment mostly positive. It was triggered by weekend headlines regarding potentially lower tariffs on certain Chinese import, around 20% tariffs on tech products. Market cheers on that since it could indicate more exemption on tariffs. USD/JPY is trading 0.22% lower at 143.12 despite opening 40 pips higher than Friday's close as JGB outperform U.S. Treasury yields.

The broad risk atmosphere has improved over the weekend's Trump suggests smartphones, computers and other tech products from China will only be subjected to 20% tariff, instead of 145%. While China has halted exports of rare earth minerals and materials critical to sectors like autos, aerospace, and semiconductors. but market participants are choosing to cheer on Trump's stance change. U.S. major equity indexes are off opening high yet still higher than Friday's close while regional equities are outperforming. AUD/USD has closed the opening gap and is still trading 0.05% higher at 0.6293, NZD/USD is up 0.44% and USD/CAD is trading unchanged than Friday's close. Else, EUR/USD is trading 0.11% higher after opening lower, GBP/USD is up 0.13%.

North American session

US data was mixed, March PPI was weaker than expected at -0.4%, -0.1% ex food and energy, but the preliminary April Michigan CSI plunged to 50.8 from 57.0. Inflation expectations surged, the 1-year view to 6.7%, the highest since 1981, and the 5-10 year view to 4.4%, the highest since 1991. Fed talk remained mostly hawkish. The data was not a major factor for the markets.  

Early weakness in equities and gains in long-term UST yields gave way to a corrective rise in equities and a corrective flattening in bonds. USD/JPY rose to 144 from 142. EUR/USD fell from highs above 1.14 to lows below 1.13 before a modest late correction higher. EUR/GBP had little direction but EUR/CHF was lower. USD/CAD was quiet but AUD/USD saw some late gains to reach .63.