Asia Summary and Highlights 7 May
Iran to deliver response to U.S. war-ending proposal via Pakistan mediators on Thursday
Saudi base ban forced Trump to pause Strait of Hormuz shipping operation
Asia Session
All eyes will be on Iran's response for U.S. war ending peace proposal. Market participants have been looking at the bright side but results could be polarized. It is also reported earlier that Saudi Arabia has banned the U.S. using its aircraft base for Project Freedom, leading to Trump pausing the operation. U.S. major equity indexes are performing individually while precious metal gains. AUD/USD is trading 0.18% higher at 0.7250. NZD/USD is trading 0.14% higher while USD/CAD is unchanged with oil slightly lower.
There is no actual intervention on Thursday, but verbal ones. It is nothing special and does not indicate imminent physical intervention. The Japanese market end and see JGB yields lower. USD/JPY is trading 0.02% higher at 156.36. Else, EUR/USD is up 0.04% and GBP/USD is up 0.03%.
North American session
Hopes that Iran and the US were moving towards a deal persisted, though comments from Trump that Iran would face a new wave of bombing if it did not accept a deal did see the USD come off its lows. USD/JPY corrected to 156.40 from around 156 while EUR/USD moved back to 1.1750 after failing to break 1.18. EUR/GBP was slightly firmer but EUR/CHF slightly softer. USD/CAD advanced to 1.3640 from 1.36 while AUD/USD returned to 0.7240 after peaking near .7280.
April’s ADP employment report was slightly stronger than expected with a 109k increase. Fed’s Musalem stated that risk have been shifting towards the inflation side of the mandate.