Asia Summary and Highlights 8 Jan
Japan Labor Cash Earnings +0.5% y/y
Asia Session
The Australian November trade balance is a miss with both the import and export rotating lower from the October figure. The deputy governor of RBA also downplayed the recent headline CPI moderation but also did not mention about a rate hike in February. However, the deputy governor is suggesting the easing cycle has likely ended. The broader risk sentiment is not upbeat with most major equity indexes in the red. AUD/USD is trading 0.29% lower at 0.6701, NZD/USD is trading 0.19% lower while USD/CAD rises 0.06%.
The Japan November Labor Cash Earnings came in poorly at +0.5% y/y. It is a dovish surprise and with CPI remain hot, real wage dip deeper into negative territories. However, with political roadblock ahead of BoJ, the dovish surprise in wage is unlikely to affect the JPY significantly in this time period. USD/JPY is trading 0.01% higher at 156.76. Else, EUR/USD is up 0.04% and GBP/USD is down 0.03%.
North American session
USD data saw December’s ADP employment report slightly weaker than expected with a 41k rise, but still more than fully reversing November’s 29k decline. Later December’s ISM services index at 54.4 from 52.6 was significantly stronger than expected, probably outweighing a weaker than expected November job openings outcome, -303k to 7.146m.
The USD was generally stronger, USD/JPY rebounding to 156.75 after slipping to 156.40. EUR/USD was only marginally softer at 1.1680 after failing to reach 1.17, but EUR/GBP, at .8750 from .8650, and EUR/CHF, at .9315 from .93, were firmer. USD/CAD advanced to 1.3850 after slipping to 1.38. Modest AUD/USD losses meant AUD/CAD was able to move back above .93 after slipping below.