Asia Summary and Highlights 6 Mar

Asia Session

The Australian 2023 Q4 GDP missed estimate on a q/q basis at 0.2%, unchanged from Q3 and treads lower y/y to 1.5% from 2.1% in the previous quarter. We are finally seeing domestic demand succumb to inflationary pressure with the household savings ratio increased to 3.2% from 1.9%. The Australian domestic demand has been supporting the economy unsustainable for the past quarters with negative real wage. The report signals the beginning of Australians' reaction towards depleting savings. Regional sentiment is positive and see the AUD/USD supported and trading 0.21% higher at 0.6517, NZD/USD also 0.16% hihger at 0.6096 while USD/CAD slipped 0.08% with oil gaining more than 30 cents. 

Reuters reported that Bank of Japan will likely revise down assessment on consumption and output without changing the forecast for moderate economic recovery at March meeting. Household spending and auto disruption were cited as the key reasons. The headline also said the changes are unlikely to affect timing of exit from stimulus. From the wage negotiation end, we are hearing that Toyota will be responding to the union hike demand on next Wednesday. U.S. Treasury Yields are lower while JGB yields higher. USD/JPY rotated below 150 to 149.81 and is 0.15% lower for the session. Elsewhere, EUR/USD is 0.01% lower and GBP/USD unchanged.

North American session

The USD traded a little lower through the North American session, with the JPY the best performer. USD/JPY lost around 45 pips to 149.85 after hitting a low of 149.70. EUR/USD spiked above 1.0870 on the date but gradually slipped back to near 1.0850, barely above pre-data levels. Gains in AUD/USD and GBP/USD also faded while USD/CAD ended back near the day’s highs around 1.36. 

USD weakness was driven by softish US data, with the ISM services index slightly on the weak side of expectations, although the details were mixed, with new orders and busuness activity higher, and employment and prices slipping.