Asia Summary and Highlights 9 December

Asia Session

The headline Q3 GDP has been revised higher to 0.3% from 0.2% in the preliminary data. However, private consumption is revised lower to 0.7% from 0.9%, while CAPEX is revised higher to -0.1% from -0.2%. If you look past the detail, it could be supportive for our call of a December hike from the BoJ. Echoed by Japan's main opposition leader Yoshihiko Noda's call for gradual BOJ rate hikes. USD/JPY is trading 0.05% lower at 149.89 as both the U.S. Treasury and JGB yields remain depressed.

U.S. and major equity indexes are little changed while regional equities are down half a percent. The market does not seem to be much bothered the the weekend geopolitical news, including the political change in Syria and potential Israel intervention.  AUD/USD is down 0.13% at 0.6381, NZD/USD fell 0.39% to 0.5806 with New Zealand Prime Minister Luxon's remark that he is committed to further efforts to lower inflation and interest rates. Else, EUR/USD is down 0.3%, GBP/USD is down 0.17% and USD/CAD rose 0.12%.

North American session

November’s US non-farm payroll with a 227k increase was near consensus, but with 56k in upward back month revisions. Average hourly earnings were on the firm side with a 0.4% increase but unemployment rose to 4.2% from 4.1%. Overall, a fairly strong report, but with markets seeing it as not quite strong enough to cause the FOMC to pause in December the USD initially slipped on the release, EUR/USD rising to 1.0630, GBP/USD above 1.28 and USD/JPY down a big figure to 149.40.  

However, with Fed talk from Bowman, Goolsbee, Hammack and Daly making it clear a December ease was far from assured, and the Michigan CSI rising in its preliminary December release to 74.0 from 71.8, the USD more than fully erased its post-data losses, EUR/USD falling to near 1.0550 and GBP/USD below 1.2750. USD/JPY however saw only a partial reversal of its post-data losses, settling near 150.  

Canadian employment saw a stronger than expected 50.5k rise, but with 45k of that coming in the public sector and unemployment up to 6.8% from 6.5%, USD/CAD rose by a big figure to 1.4150. AUD/USD also slipped, below .64, with AUD/CAD above pre-data levels but well off its highs.