Asia Summary and Highlights 1 April

Asia Session

In the April 1st meeting, the RBA has kept rates unchanged at 4.1% as per our forecast. They cited risk to the upside as  a key reason to keep rate unchanged. It is hardly surprising and their forward guidance continue to points toward data dependency. With their data dependency approach and favors inflation sustainably in mid range, it seems to suggest they are looking for the trimmed mean CPI to reach 2.5% before their next cut. AUD/USD is up 0.27% to 0.6263, NZD/USD is 0.04% higher while USD/CAD is down 0.05%.

The market is calmer on Tuesday after a vibrant start to the week. The February Japan Unemployment Rate has come in lower than estimate at 2.4% but historically the data has not been proportionately correlated to wage growth and has little impact towards the JPY. BoJ is reported to begun trimming their purchases of 10–25-year JGBs as planned with full review in June. USD/JPY is trading 0.11% lower at 149.78 with JGB outperform U.S. Treasury yields. Else, EUR/USD is unchanged and GBP/USD is up 0.08%.

North American session

Equities were under pressure early but subsequently recovered and this saw USD/JPY rising above 150 from 149 before a modest late correction. AUD/USD reversed early losses to end near 0.6250 but USD/CAD, while finding resistance near 1.44, saw little reversal of early gains. EUR/USD was fairly stable, recovering from a dip below 1.08, but EUR/GBP and EUR/CHF were firmer near .8370 and .9570 respectively. 

There was not much news though the Dallas Fed manufacturing survey was weak at -16.3 from -8.3. Comments from Fed’s Barkin and Williams took a cautious approach to policy given uncertainty.