Asia Summary and Highlights 22 May
Japan April National Headline CPI 1.4% y/y
Asia Session
The Japan National CPI remain shielded by stimulus as we see headline and ex fresh food at 1.4% y/y. Ex fresh food and energy also slipped below 2% at 1.9% y/y. The extension of energy stimulus is till June and figures before that has limited credibility. The underlying inflation would arguably be more important but was previewed by soft household consumption. USD/JPY is trading 0.11% higher at 159.09.
The upbeat positive risk sentiment does not seem to attract Aussie bids as precious metal stay depressed. Market participants are hopeful of a swift end towards the prolong geopolitical tension, which so far is seeing nothing concrete. AUD/USD is trading 0.1% lower at 0.7142. NZD/USD is unchanged while USD/CAD rises 0.1% with both Brent and WTI slightly lower. Else, EUR/USD is down 0.02% and GBP/USD unchanged.
North American session
The USD continued to gyrate on the latest reports or rumors coming from the Middle East. Early trade saw the USD getting a bid assisted by comments from Iran’s Supreme Leader insisting enriched uranium remain in Iran reducing Wednesday’s optimism that a deal with the US might be close. The afternoon however saw the USD reverse its gains on talk a deal might still be in the works, leaving the USD little changed, USD/JPY near 159 and EUR/USD near 1.1620. AUD/USD and USD/CAD both saw marginal gains leaving AUD/CAD at .9850 from near .98.
US data was mixed if generally healthy, initial claims at 209k from 212k, April housing starts down by 2.8% but permits up by 5.8%. May’s Philly Fed manufacturing index at -0.4 was weaker than expected but the S and P manufacturing PMI picked up to 55.3 from 54.5, though services at 50.9 from 51.0 remained subdued.