Asia Summary and Highlights 9 July

Asia Session

The Bank of Japan will be holding in-person meetings with market participants this week, including banks, securities firm and bond purchasing FI, in regard of the coming changes in bond purchase program to be announced on 30th July. Currently, market participants are expecting more than 1 trillion JPY cut in the first year and 2-3 trillion JPY cut in the second year. It looks like the BoJ is getting market participants ready for the cut and checking out response from them. USD/JPY is trading 0.12% higher at 160.98 while U.S. Treasury yields are steady across the curve and JGB yields slips.

Else, there is not much in the FX market with USD a tad softer. GBP/USD, USD/CAD and NZD/USD are unchanged. EUR/USD is up 0.04% and AUD/USD is up 0.07% as risk sentiment is broadly positive.

North American session

The USD saw some early slippage which was fully reversed in a largely news-free session. GBP/USD advanced to near 1.2850 before slipping back to near 1.2810 while USD/JPY slipped to 160.50 before settling in mid-range near 160.75. EUR/USD saw a modest dip to 1.0825 but EUR/JPY slipped back to near 174 after trading above 174.50 in Europe. EUR/CHF sustained its European rebound.

Markets are awaiting Powell’s testimonies to Congress due on Tuesday and Wednesday and US CPI on Thursday. The New York Fed’s survey of consumer expectations saw the 1-year view slip to 3.02% in June from 3.17% in May, while the 5-year view slipped to 2.83% from 3.00%. However the 3-year view increased to 2.93% from 2.76%.