Asia Summary and Highlights 12 May

Asia Session

Over the weekend, there seems to be positive development between the U.S.-China trade talks as we heard constructive remarks from both sides. The broad risk sentiment cheers on such development and see a jump at the opening bell. Apart from trade, Trump also says prescription drug and pharma prices will be reduced almost immediately by another executive order. USD/JPY jumped to 146.16 from 145.36 Friday close and is currently trading higher at 145.88.

The broad risk sentiment stays upbeat after positive remarks from both the U.S. and China side. While market participants patiently await for the joint statement, U.S. major equity indexes are cheering for the development with an average gain of 1.5% from Friday's close. Regional equities in China and HK are also in positive territory but off session high. AUD/USD is trading 0.26% higher at 0.6427 with a 10 pips opening gap, NZD/USD is unchanged from the 0.25% opening gap at 0.5952 while USD/CAD is down 0.08% from Friday's close. Else, EUR/USD is down 0.17% and GBP/USD down 0.13%, both haven't closed the gap lower yet.

North American session

The USD saw some early slippage with a Trump suggestion suggesting 80% tariffs on China would be appropriate not seen as constructive for upcoming weekend talks, but a dip in USD/JPY below 145 proved temporary. EUR/USD gains failed to test 1.13 and a return to near 1.1250 was seen. GBP/USD and AUD/USD were however able to sustain moves marginally above 1.33 and 0.64 respectively. 

An exception to a softer USD tone was USD/CAD, which saw modest gains to 1.3935 from 1.3910. April’s Canadian employment report was soft, unemployment rising to 6.9% from 6.7% and employment managing a modest 7.4k increase only because of a rise in government jobs due to the election. There was no significant US data. Multiple Fed speakers suggested there was no urgency to change rates.