Asia Summary and Highlights 11 Dec
Australia November employment -21.3K
U.S. major equity indexes are reversing post FOMC gains
Mexico approves tariffs as high as 50% tariff on Chinese and Asian imports
Asia Session
The Australia November employment came in low at -21.3K with a lower participation rate of 66.7%. It came after a strong October and continue to point towards a choppy labor market. However, the RBA's hawkish stance on Wednesday's meeting will deem such poor data not more than a knee-jerk dip in the Aussie than see monetary policy shift's impact. AUD/USD is trading 0.61% lower at 0.6635 but was mostly dragged by the negative risk sentiment rather than poor jobs, NZD/USD is trading 0.37% lower while USD/CAD rises 0.16%.
U.S. major equity indexes are reversing post FOMC gains, triggered by concern on Oracle's A.I. spending that worsens after earnings report. On the other hand, we have Mexico approving tariffs as high as 50% tariff on Chinese and Asian imports which does not help sentiment at all. USD/JPY is trading 0.04% lower at 155.93. Else, EUR/USD is down 0.05% and GBP/USD is down 0.11%.
North American session
Ahead of the FOMC the USD was generally softer, USD/JPY falling to 156.35 from 156.75 and EUR/USD rising to 1.1660 from 1.1635. A slightly lower than expected 0.8% rise in the Q3 employment cost index may have played a part but got little immediate response. The Bank of Canada left rates unchanged as expected. The BoC noted recent stronger data but did not see its 2026 outlook significantly changed. USD/CAD initially bounced on the BoC announcement but had turned lower ahead of the FOMC decision.
The FOMC eased by 25bps with the dots unchanged from September. The USD initially slipped on the decision but picked up early in Powell’s press conference when he said rates were now in the plausible range of neutral. However later in the press conference USD losses resumed, comments that non-farm payrolls may be overstated and that the actual job picture is marginally negative noted. USD/JPY fell below 156 and EUR/USD touched 1.17. USD/CAD fell below 1.38 from 1.3850 ahead of the BoC decision while AUD/USD rose to .6680 from .6640. EUR/GBP was fairly stable but EUR/CHF fell to .9355 from .9370.