Asia Summary and Highlights 12 December

Asia Session

USD/JPY has paused the recent rally on Thursday's Asia session with both the U.S. Treasury and JGB yields are higher. As we are getting closer to the 50% retracement of the recent correction in USD/JPY, market participants seems to be cautious in placing more longs with the possibility of a BoJ hike in a week. USD/JPY is trading 0.11% lower at 152.28.

We have another solid labor report from Australia on Thursday. The headline unemployment rate fell to 3.9% from 4.2% and headline job growth is robust at 35.6k with a large chunk of it come from full time employment. It is a report RBA would be happy to see as they are pushing back early cut. AUD/USD is trading 0.74% higher at 0.6416, NZD/USD is trading 0.39% higher at 0.5807 while USD/CAD is 0.08%. Else, EUR/USD is up 0.11% and GBP/USD is up 0.13%.

North American session

US CPI data was as expected, with gains of 0.3% both overall and ex food and energy, but with the data seen as allowing a Fed easing next week UST yields dipped on the release, as did the USD. However. with UST yields rebounding, the USD recovered roughly back to where it was before the release, restoring its European gains, with USD/JPY near 152.50 and EUR/USD near 1.05. 

The Bank of Canada eased by 50bps as expected but the statement removed a reference to expecting future rate cuts and Governor Macklem stated he anticipated a more gradual approach going forward. USD/CAD dipped to 1.4120 from near 1.4190, before recovering to around 1.4160.