Asia Summary and Highlights 10 February
Trump's 25% Universal Tariff on Steel and Aluminum Scared the market initially
Asia Session
The weekend tariff talk from Trump has caught market's attention and see risky currency opened lower. The market recovered quickly as participants are getting used to tariff man's approach and such tariff was partially previewed on late Friday Nevertheless, USD is still outperforming majors in the Asia session on Monday, only AUD/USD, NZD/USD, GBP/USD and USD/JPY once closed the gap. On the other hand, the steady rise in JGB yields have led 10yr JGB yields to be the highest in more than a decade. Yet, the ebbs and flow of market has been taking the driver seat and see USD/JPY rose 0.39% to 151.97.
The 25% universal tariff on steel and aluminum from Trump scared the market initially. As session progress, we all major equity indexes back in the green with HSI leading at over 1% gain despite China floating the idea of tariff retaliation. AUD/USD is up 0.03% to 0.6274, NZD/USD is down 0.02% at 0.5658 while USD/CAD rose 0.33%. Else, EUR/USD is down 0.08% and GBP/USD is up 0.03%.
North American session
US non-farm payrolls were weaker than expected with a rise of 143k but the USD saw only a momentary dip with average hourly earnings stronger than expected with a rise of 0.5% and unemployment falling to 4.0% from 4.1%. Fed speakers Kashkari, Goolsbee and Kugler all later stated the labor market remained healthy. A dip in the Michigan CSI, in particular a sharp rise in the 1-year inflation view to 4.3% from 3.3%, saw equities and USD/JPY dip.
Equity weakness extended on a Reuters report that Trump planned to issue reciprocal tariffs against unnamed countries, which saw USD/JPY extend losses to see lows below 151 but the USD bouncing elsewhere. Trump later confirmed that next week would see measures taken on many countries. USD/JPY rebounded to around 151.40, but EUR/USD was the main loser, falling to 1.0330 after briefly touching above 1.04 on the US employment data. USD/CAD, after slipping below 1.43 assisted by a strong 76k increase in Canadian employment, corrected on the tariff report, but later fell back to touch fresh lows for the day.