Asia Summary and Highlights 27 November

Asia session

The RBNZ cut its cash rate by 50bp to 4.25% in the November meeting, revised the August OCR to indicate more front loading of rater cut in 2025 and sees CPI, core CPI & expectation to be closer to the middle of target range with further moderation momentum. But the Kiwi jumped as there was both a malfunction link for RBNZ's old release of hiking (which may have prompted algos reacting) and the November OCR forecast picture suggests  to be slightly higher than the August forecast in 2027.  While the later was clarified by Governor Orr as a misunderstanding, NZD/USD is still up 0.56% at 0.5867.

The Australian October monthly CPI continues to stay low at 2.1% y/y, however the RBA has shaken off anticipation of early easing by suggesting government energy subsidy have taken some weight out of the inflationary burden for Australians. The RBA trimmed mean remain high and RBA sees the first cut to be in the middle of 2025. AUD/USD is trading 0.03% lower at 0.6472. USD/JPY continues to tread lower as U.S. Treasury Yields is in the red across the curve while JGB yields in the green. The correction in USD/JPY seems to be gathering momentum, after all there was a fifteen figure rally since September. USD/JPY is trading 0.53% lower at 152.27. Else, EUR/USD is down 0.09%, GBP/USD is unchanged and USD/CAD rose 0.15%.

North American sessions

The USD saw early losses, USD/JPY falling to 153, EUR/USD rising above 1.05, GBP/USD above 1.26 and AUD/USD above .65, but with equities generally proving resilient to tariff concerns, the USD recovered. AUD/USD fell to .6460 but USD/JPY was able to sustain only a partial recovery from the lows. EUR/USD and GBP/USD returned to near European opening levels around 1.0475 and 1.2550 respectively. USD/CAD remained firm, but slipped back below 1.41.

US data saw little response. November consumer confidence saw only a modest response to the election, rising to 111.7 from 109.6, but October new home sales plunged by 17.3% to 610k, the fall led by the hurricane-impacted South. Front end UST yields slipped after FOMC minutes saw little change to upside inflationary risks despite downside risks to employment having been seen as reduced. This helped the USD stabilize after having been recovering into the release.