Asia Summary and Highlights 20 February
Australia January 2025 unemployment rate 4.1%
Asia Session
The Australia January unemployment rate rose to 4.1% y/y from 4% but was attributed to the historic strong participation rate of 67.3%. Headline employment change is a plus 44k with huge gains in full time post, suggesting the labor market remains solid. The RBA has begun cutting earlier this week and already acknowledged the upside risk in labor market, yet their concern on such led hotter inflation has dissipated on slower than expected wage growth. AUD/USD is up 0.31% at 0.6364, NZD/USD also 0.26% higher at 0.5719 while USD/CAD slips 0.1% as USD treads lower.
In Thursday’s Asia session, we are hearing repetitive remarks from Trump on his tariff and other policy. The policy uncertainty seems to be dragging risk lower with regional sentiment softer than U.S. major equity indexes. USD/JPY is fast approaching the 150 figure at 150.31 with U.S. Treasury Yields falling faster than JGB yields. Else, EUR/USD is up 0.09% and GBP/USD is up 0.1%.
North American session
The USD was overall little changed in North America, though USD/JPY was marginally weaker near 151.50 and USD/CAD marginally stronger given threatened auto tariffs if meeting resistance near 1.4250. EUR/USD did come under some pressure testing 1.04 as Trump described Ukrainian President Zelensky as a dictator but recovered to around 1.0425 with FOMC minutes not seen as hawkish. Comments from Fed’s Bostic had a similarly moderate tone.
US housing starts fell 9.8% to 1366k, on the weak side of expectations, but with permits up 0.1% to 1483k, above consensus, the starts dip looked weather-induced.
European morning session
The USD was generally firmer through the European morning. EUR/USD lost 30 pips to 1.0430, and GBP/USD lost 30 pips to 1.2590. USD/JPY rise more modestly, gaining 20 pips to 151.80, and the AUD, CAD and scandis saw similar declines. USD/CHF was little changed at 0.9035.
The main news of the morning was the UK January CPI data, which was higher than expected at 3.0% headline, 3.7% core, although the core rise was broadly in line with expectations. GBP managed some initial gains after the data, with EURGBP hitting a low of 0.8273, but finished the morning little changed near 0.8285. Otherwise, there was little news of any real note. The Eurozone current account surplus for December was larger than expected at EUR38.4bn.