Asia Summary and Highlights 13 December

Asia Session

Regional sentiment  is in the red on Friday's Asia session and U.S. major equity indexes retreats from opening high. Headline crossed the wire that recently China has begun a regulatory probe into NVidia, blocked the export of critical minerals to the U.S., acts that seems to be retaliatory to future Trump and current U.S. trade policy. AUD/USD is down 0.06% to 0.6364, NZD/USD is also down 0.06% to 0.5765 while USD/CAD rose 0.15% as USD gains.

There are no more BoJ leaks on Friday as the market seems to be perceived that the BoJ will likely be holding in the December meeting. While we continue to favor a 25bps hike from BoJ with the current inflationary development, the headline seems to suggest a 10bps hike max with a potential hold on the cards. USD/JPY is challenging the 153 figure at 153.02, up 0.27% for the session as JGB yields slide while U.S. Treasury Yields steadies. Else, EUR/USD is down 0.06% and GBP/USD is down 0.12%.

North American session

Pressure increased on the riskier currencies through the North American session as equities slipped and UST yields advanced, the latter reversing an early dip on higher US initial claims. USD/CAD broke above 1.42, GBP/USD fell to 1.2670 and AUD/USD fell to .6365. EUR/USD saw little response to an as expected 25bps ECB easing, and subsequently oscillated around 1.05, before falling to 1.0465. EUR/GBP and EUR/CHF were however firmer near .8260 and .9335 respectively.

US initial claims rose sharply to 242k from 225k. November PPI was higher than expected at 0.4% on a surge in food but the core rates were subdued, 0.2% ex food and energy and 0.1% ex food, energy and trade. There was not much response to the data but USD/JPY fell below 152, before rebounding to end firmer near 152.65.