Asia Summary and Highlights 15 Dec
China Vanke fails to secure delay on $284m bond payment, gets just 5 days breathing space
BOJ official says Tankan shows easing trade fears but rising cost pressures
Asia Session
It is reported that China Vanke fails to secure delay on $284m bond payment and only have 5 days of grace period to pay. Along with the poor sentiment carried through, the Aussie face an opening gap lower. As the Asia session progress, we could see sentiment improving, led by U.S. major equity indexes. AUD/USD is now trading 0.11% lower at 0.6652 as regional equities remain in the red. NZD/USD is trading 0.46% lower after RBNZ Governor Breman hints a distant probability of another rate cut while USD/CAD slips0.03%.
Market participants are increasing their anticipation of a December hike after BOJ official says Tankan shows easing trade fears but rising cost pressures. The Tankan survey has shown a strong read yet the BoJ comment supports the rate normalization path. USD/JPY is trading 0.39% lower at 155.19. Else, EUR/USD is down 0.03% and GBP/USD is down 0.11%.
North American session
Equities came under pressure led by tech which saw some early losses for the AUD and CAD, but losses were eventually marginal, USD/CAD meeting resistance near 1.38 and AUD/USD correcting a move below .6650. Equity weakness weighed on USD/JPY, but losses were marginal, to 155.80 from 155.90. The EUR was generally firm, though EUR/USD gains from a 1.1720 low found resistance at 1.1750. EUR/GBP advanced to .8785 from .8765 and EUR/CHF to .9345 from .9325.
Outgoing FOMC voters Schmid and Goolsbee explained their hawkish recent dissents but incoming voter Paulson was quite dovish, concerned more about employment than inflation.