Asia Summary and Highlights 24 September
RBA leaves cash rate unchanged at 4.35%, as expected
Asia Session
The RBA has left cash rate unchanged at 4.35% as expected due to the current inflationary picture remaining above RBA's target range. RBA is waiting for the CPI to go lower before easing where we expect will be around the upperband of target range by year end 2024. AUD/USD is trading 0.38% higher at 0.6863, along with strong gains in the regional equity indexes in China and Hong Kong, both up more than 3% as China announced more stimulus. NZD/USD also 0.21% higher at 0.6279 while USD/CAD slipped 0.22% as oil gains half a dollar.
The U.S. Treasury Yields are nonperforming individually across the curve while JGB yields lower. USD/JPY is trading 0.28% higher as the risk mood is broadly upbeat. Else, EUR/USD is up 0.07% and GBP/USD is up 0.13%.
North American session
EUR/USD saw some recovery from its European lows but was unable to manage a full reversal, and after touching above 1.1140 slipped back below 1.1120. EUR/GBP and EUR/CHF extended losses to near .8330 and .9410 respectively.
USD/JPY saw some early gains above 144 but later slipped back to 143.50 as early gains in UST yields faded, in part on slippage in oil. The USD was softer versus the riskier currencies, GBP/USD rising to near 1.3350, AUD/USD rising to near .6850 and USD/CAD falling to near 1.35.
Fed’s Kashkari and Bostic backed the 50bps easing but suggested subsequent moves would be smaller, but Goolsbee later sounded more dovish, expressing concerns about labor market risks. US S and P PMIs slipped, manufacturing to 47.0 from 47.9 and services to 55.4 from 55.7, but looked resilient relative to those in Europe.