Asia Summary and Highlights 19 February

Asia Session

The RBNZ cut by 50bps as expected and guided there are more cuts to come. It seems to suggest the RBNZ is taking the opportunity of lower inflation to ease and stimulates the soft NZ economy. The slightly higher than expected Q4 CPI does not seem to bother them. NZD/USD dipped on announcement and see NZD/USD initially dipped to 0.5677 before reversing traction to trade 0.28% higher at 0.5719, seems like some "sell the fact" trade. AUD/USD is also 0.15% higher at 0.6363 with positive risk sentiment while USD/CAD slipped 0.1% on higher oil.

On Wednesday, we are hearing hawkish remark from BoJ's policy board member Takata and Trump suggesting new tariffs could be introduced by April 2. While it does not seem to dim the bidding interest in U.S. equities, these headlines arer good enough to also stimulate some JPY bids. USD/JPY is down 0.12% at 151.86 with JGB yields outperforming U.S. Treasury Yields. Else, EUR/USD is up 0.04% and GBP/USD unchanged.

North American session

There was not much FX movement in North America. UST yields were firmer and this helped USD/JPY advance to 152 after an early dip to near 151.50. EUR/USD ended in the lower half of a 1.0435 to 1.0485 range. 

Data had limited impact though a dip in February’s NAHB homebuilders’ index to 42 from 47 was a brief negative for the USD. Earlier February’s Empire State Manufacturing survey increased to 5.7 from -12.6. Canada’s January CPI rose to 1.9% from 1.8% yr/yr with gains in the BoC core rates, which helped USD/CAD to largely erase earlier gains.