Asia Summary and Highlights 4 Dec
Australian October Trade Balance AUD4385mn
Japan's Chief Cabinet Sec. says concerned over rapid, one-sided yen moves
Asia Session
We are hearing more from Japan's Chief Cabinet Secretary Kihara that he is concerned over rapid, one-sided yen moves. It is a continuous attempt in verbal intervention despite JPY retreats from recent low. With the December BoJ meeting in sight, very likely market participants will be careful in placing their position. USD/JPY is trading 0.18% higher at 155.48. The 30yr JGB received the highest bid-to-cover since 2019, suggest strong demand for long term JGBs.
The Australian trade balance beats estimate at AUD4385mn for October. Both import and export is positive m/m. At the same time, household spending stays solid at 5.6% y/y. Neither favors an imminent cut from the RBA. Regional equities are outperforming U.S. major equity indexes so far on Thursday. AUD/USD is trading 0.11% higher at 0.6608, NZD/USD is trading 0.07% lower while USD/CAD rises 0.08%. Else, EUR/USD is up 0.1% and GBP/USD is up 0.13%.
North American session
While reaction to the data was modest, the USD was generally weaker after a 32k decline in November’s ADP employment report, which was seen as raising the chances of a Fed easing next week. Other US data had less impact, an on consensus 0.1% increase in September industrial production and an unexpected modest increase in November’s ISM services index, to 52.6 from 52.4.
USD/JPY slipped from 155.40 to fund support at 155. EUR/USD saw only marginal gains to 1.1675 from 1.1665, but GBP/USD rose to 1.3350 from 1.33 as EUR/GBP slipped below .8750 from .8770. AUD/USD gains reached .66 and with USD/CAD little changed at 1.3950 AUD/CAD moved above .92.