Asia Summary and Highlights 11 December

Asia Session

The Japan November PPI has come in stronger than estimated both m/m and y/y, though not by a huge extent. While PPI has been a poor indicator of its transferal to CPI, the gradual change in price setting behavior will strengthen such relationship.  USD/JPY is trading 0.30% lower at 151.5 as both the U.S. Treasury and JGB yields rose. 

Risk asset are performing individually on Wednesday with HSI leading the loss and Chinese equities in the green. As China piled up pressure on Taiwan with military exercise, Taiwan says they will take necessary defense measures re Chinese military activities. However, this are the words we will be hearing from both sides while the risk of an actual clash is minimal. AUD/USD is trade 0.03% higher at 0.6379, NZD/USD is unchanged while USD/CAD slips 0.12% with oil up half a dollar. Else, EUR/USD and GBP/USD are unchanged.

North American session

After largely ignoring a downward revision to Q3 unit labor costs to 0.8% from 1.9%, the USD picked up later in the morning, but with the exceptions of USD/JPY and USD/CHF, the USD advance struggled to hold. USD/JPY saw highs above 152 with only a modest subsequent correction, while USD/CHF moved up to .8825. EUR/USD found support at 1.05 and recovered to 1.0525 with EUR/CHF stronger but EUR/GBP weaker as GBP/USD rebounded to 1.2775 after slipping to 1.2725. A bounce in USD/CAD to near 1.42 was largely reversed. AUD/USD saw a low of 0.6365 and ended slightly weaker.