Asia Summary and Highlights 5 May

Asia Session

Risk sentiment slumped on Monday as we heard from the tariff man that not only he has no plan to speak with China this week, he also came up with some interesting new tariffs on overseas movie production. Risk asset mostly opened sharply lower with gold trading higher. USD/JPY is down 0.63% to 144.04.

After Trump's remark over the weekend, U.S. equities indexes took a hit in the opening and stayed low throughout the Asia session. OPEC+ agreed over the weekend to raise output by another 411,000 barrels per day in June and warns early end of voluntary cuts if members do not comply with current limit. AUD/USD is trading 0.6% higher at 0.6483, NZD/USD is up 0.74% to 0.5989 while USD/CAD slips 0.19%. Else, EUR/USD is up 0.4% and GBP/USD is up 0.24%.

North American session

The US non-farm payroll was stronger than expected with a 177k April increase, though 58k in negative back month revisions weighed against the headline surprise, and average hourly earnings were weaker than expected with a rise of 0.2%. Unemployment was unchanged at 4.2% as expected.  

While UST yields rose significantly and equities advanced, the FX response to the data was limited. Mid-morning did see some USD slippage, but this was largely reversed, with USD/JPY slightly firmer near 145 and EUR/USD slightly weaker near 1.1310. The USD did however see marginal slippage versus AUD and CAD.