Asia Summary and Highlights 25 Jun

Asia Session

The monthly CPI for Australia dropped to 2.1% y/y, very close to the lower target band of RBA’s inflation target. What is more important is the fall of trimmed mean CPI past mid point of target range to 2.4% y/y, making sense of the previous cut from the RBA. AUD/USD is trading 0.2% higher at 0.6502, NZD/USD is trading 0.32% higher at 0.6026 while USD/CAD rise 0.03%.

BoJ's Tamura came out hawkish after the BoJ summary of opinion proven little cues. He warns decisive rate hike may be needed if inflation risks rise, even amid uncertainty from U.S. tariffs and inflation is tracking slightly above forecasts and may hit the 2% target earlier than expected. However, he finished with not thinking the BoJ need an imminent rate hike. USD/JPY is trading 0.11% higher at 145.04 with JGB yields falling faster than U.S. Treasury yields. Else, EUR/USD is up 0.06% and GBP/USD is up 0.07%.

North American session

The USD lost some ground with Fed Chairman Powell, stating that while an expected tariff pass-through to inflation was keeping rates above neutral, it was possible inflation could come in less strong than expected, and that sustained hopes that easing could be seen by September. A fall in consumer confidence to 93.0 in June from 98.4 may also have contributed, this following declines in April house prices in surveys from FHFA and S and P Case-Shiller. In addition to Powell, Fed speakers Bostic, Hammack, Williams and Kashkari expressed caution towards easing, with Hammack particularly hawkish. 

USD/CHF fell to .8050 from .8090 as EUR/CHF fell to .9350 from near .94. EUR/USD did advance to 1.1620 from 1.16 while EUR/GBP was stable near .8525 after slipping in Europe. USD/JPY slipped to 144.70 from near 145 but AUD/USD was little changed and USD/CAD more than fully reversed a dip below 1.37. Equities were positive and oil weaker with angry comments from Trump towards both Israel and Iran appearing to restore the ceasefire after some violations.