Asia Summary and Highlights 8 January

Asia session

While the Australian November monthly CPI edged higher to 2.3% from 2.1% previously, the trimmed mean CPI slipped to 3.2% from 3.5%. This is the metric RBA favored in the last meeting and could points toward earlier easing from the bank if such persists. AUD/USD is down 0.04% to 0.6228, back from session low at 0.6211. NZD/USD also down 0.02% while USD/CAD slipped 0.12% as oil up thirty cents.

After the initial suppression from Tuesday's verbal intervention form Japan PM, USD/JPY is regaining traction as we hear little fundamental shift to the equation. However, we are beginning to see 10yr JGB reaching decade high. If momentum continues, the strength in USD/JPY shall be short-lived. USD/JPY is trading 0.09% higher at 158.18. Regional sentiment tanked with both the Chinese and HK equity indexes down more than 1.5% on disappointing support policy from NDRC while U.S. equity indexes a tad higher after the overnight slump. Else, EUR/USD is up 0.13% and GBP/USD up 0.05%.

European and North American sessions

The USD moved higher in Europe, EUR/USD edging marginally below 1.04. Eurozone CPI was in line with expectations rising to 2.4% yr/yr from 2.2% with the core stable at 2.7%.

The main event of the day was a bounce in November US job openings, by 259k to 8.098m, the highest level since May, At the same time December’s ISM services index rose to 54.1 from 52.1. EUR/USD slipped to 1.0365 on the data extending to below 1.0350 while GBP/USD fell to 1.2480. EUR, GBP and AUD losses were sustained, AUD/USD falling to .6230, but a bounce in USD/JPY to a high of 158.42 was not, returning to near pre-data levels around 157.75 as equities slipped.

Trump threatened economic action against Denmark (over Greenland) and Canada which helped to sustain pressure on the EUR and undermined a CAD recovery after USD/CAD rose to 1.4366 on the US data. Canadian officials voiced their objections to Trump’s remarks.