Asia Summary and Highlights 1 July
France right party made gains in election
Japan Q1 GDP revised to -2.9% from -1.8%
Asia Session
The French election over the weekend has shown the far right party of Marine Le Pen making historical gains while Macron's centrist suffered losses and left alliance doing well. While these seems to be pointing towards a hung parliament, the Euro seems to be making some gains on lesser uncertainty. EUR/USD gap higher to 1.0743 from 1.0710 Friday's closed and remains higher at 1.0750 currently, GBP/USD also gap higher at 1.2658 from 1.2645 previously closed and is trading 0.08% higher at 1.2655.
After revisiting construction order, Japan has revised GDP lower for at least the last three quarters. The 2024 Q1 annualized GDP has been revised to -2.9% from -1.8%, a significantly deep recession than before. It may weigh on BoJ's decision to further tighten as they are already concerned about consumption yet the key lies in trend inflation forecast. USD/JPY is trading 0.12% higher at 161. 02 as U.S. Treasury yields slips and 10yr JGB yields closing the gap. Else, AUD/USD is down 0.07%, NZD/USD is up 0.09% and USD/CAD down 0.03%, most pair opened higher against the USD with gap once closed in the Asia session.
North American session
The USD saw only a brief dip on a subdued 0.1% increase in core PCE prices. Income with a 0.5% increase was above consensus but spending at 0.2% fell short. Fed’s Daly welcomed the core PCE price data soon after.
The main move of the day was a sharp subsequent spike in EUR/JPY through 172 that reached 172.40 before a modest correction. This saw USD/JPY and EUR/USD both firmer near 160.80 and 1.0710 respectively. AUD/USD extended gains to .6670 while USD/CAD slipped back below 1.37.