Asia Summary and Highlights 9 Apr

Asia Session

New York Times reported that no oil or gas tankers have traversed the Hormuz strait since the cease-fire, sourcing Kpler, a global ship-tracking firm. It confirms the shaky grounds of the two week ceasefire as Israel was still bombing Lebanon. Both Brent an WTI is up more than a dollar/b. U.S. major equity indexes are little changed but tilting south while regional equities underperform. AUD/USD is trading 0.05% lower at 0.7040. NZD/USD is trading 0.22% higher at 0.5835 while USD/CAD rises 0.02%. 

Market participants began to question how long the ceasefire going to last after the initial relief rally past. Both sides are denouncing each other of violation and looks like a fragile peace will not last long. USD/JPY is trading 0.08% higher at 158.65. Else, EUR/USD and GBP/USD are unchanged.

North American session

The USD maintained its Asian losses seen on the two-week ceasefire plan for the Middle East in Europe, and these were extended in early North America with USD/JPY slipping below 158 and EUR/USD moving above 1.17. However late in the day the USD saw a partial recovery, with Iran stating the ceasefire had been violated. A key disagreement was whether the ceasefire included Lebanon, where Israeli military action escalated, while Iran also insisted on the right to uranium enrichment. USD/JPY corrected above 158.50 while EUR/USD slipped back to 1.1650 where support was found.

FOMC minutes did see greater upside inflation risks, but were not hawkish, also seeing increased downside risk on employment and not the cause of the USD correction. The commodity currencies were fairly stable, AUD/USD near .7050 and USD/CAD near 1.3850. EUR/GBP and EUR/CHF were both lower on the day, stabilizing near .87 and .93 respectively. Equities remained firmer but UST yields largely erased early losses.