Asia Summary and Highlights 16 January

Asia Session

The Australian labor market stayed strong and see another 55.3k employment gains, with both the unemployment and participation rate ticked up by 0.1%. While most gains are in part time job, a rotation from the November report, it does not take out the strength of such report. However, the tightness in job market has not been aligned with wage growth and seen the rate cut chance in the February meeting rises. AUD/USD reversed from early highs and is trading 0.33% lower at 0.6206, NZD/USD is also down 0.15% at 0.5608 while USD/CAD rose 0.09% on softer oil.

Market chatter continues to hype on a potential January hike from the BoJ as Ueda's remark has once again brewed hope. However, one should be reading this with a pint of salt for such mood swings had happened before in previous BoJ meetings that disappoint. Until we have the "leaks", market participants should remain cautious in believing the rhetoric. USD/JPY has dipped to 155.2 on hopium and is now trading 0.37% lower at 155.84. Else, EUR/USD is up 0.02% and GBP/USD is down 0.18%.

North American session

December US CPI with a 0.4% increase was in line with expectations overall, but the ex food and energy gain of 0.2%, 0.225% before rounding, was on the low side of consensus, and the USD slipped, while USTs and equites rallied. Fed commentary after the release from Barkin, Williams and Goolsbee expressed cautious optimism, and the UST gains were largely sustained. Despite this USD gains were largely erased with the USD ending close to pre-data levels. 

EUR/USD, after bouncing to 1.0350 ended near pre-data levels around 1.03, while GBP and CAD made only marginal gains. AUD/USD, rising to .6230 from .62 performed better than most. USD/JPY fell to around 156.50 from near 157 ahead of the data.