Asia Summary and Highlights 24th February

Asia Session

Headlines crossed the wire that German’s CDU/CSU has secured majority with the far right performing worse than expected. The Euro is cheering on potential more market friendly coalition and see EUR/USD opened 10 pips higher and is trading 0.58% higher at 1.0517. GBP/USD is also 0.31% higher at 1.2675.

The BoJ does not seem to be worried about a slow grind higher in JGB yields unless it is an abrupt spike. It is understandable as it will be counterintuitive if the BoJ is looking towards further tightening but not higher yields. There was worry in the market that there will be an imminent intervention but such was already reversed on Friday as haven bids saved JPY. The USD/JPY is consolidating the moves and see it trading 0.03% at 149.27.

U.S. major equity indexes are in the green, so as Nikkei while Chinese and Hon Kong equities lag. AUD/USD is trading 0.38% higher at 0.6390, NZD/USD is also 0.29% higher at 0.5758 while USD/CAD slipped 0.24% as USD is broadly lower.

North American session

The USD took a hit on a weak February services PMI of 49.7 from 52.9, though manufacturing edged up to 51.6 from 51.2. Soon after February’s final Michigan CSI saw the 5-10 year inflation view revised up to 3.5% from 3.3%, and the USD rebounded, with the exception of USD/JPY which continued to slide, with UST yields and equites falling.  

USD/JPY fell from near 150.50 to near 149. CHF was also relatively firm with EUR/CHF falling below .94. EUR/USD ended little changed from the European morning while GBP/USD saw marginal further losses. The commodity currencies were weaker, USD/CAD rising to 1.4230 from 1.42 and AUD/USD falling to .6355 from 0.6390. BoC’s Macklem outlined the damage tariffs could potentially do to the Canadian economy, but had little market impact.