Asia Summary and Highlights 5 Nov
Sea of red in equities
BoJ Sept minutes says current real interest rates are very low, will hike if data indicates
Asia Session
On Wednesday, we are witnessing a sea of red in major equity indexes, triggered by renewed concern on valuation. As session progress, partial losses are recovered as risk positive headlines regarding tariff surface. China will keep tariffs (previously 24%) at 10% for a year and cease additional duties on certain import, including agricultural products. AUD/USD reversed course from session low at 0.6458 to trade 0.06% higher at 0.6493, NZD/USD is trading 0.2% higher while USD/CAD rises 0.06%
While BoJ's meeting minutes look supportive for the JPY, the real trigger lies in broad based risk aversion for JPY gains. Major equity indexes continue to sink with the Nikkei down more than 3%. Both U.S. Treasury and JGB yields are all lower across the curve. USD/JPY is trading 0.12% lower at 153.48. Else, EUR/USD is up 0.08% and GBP/USD is up 0.03%.
European and North American sessions
With equities weaker on banking sector and Fed policy worries markets showed a risk off tone with the USD mostly stronger. USD/JPY, after falling in Asia, saw a modest correction higher to 153.65 after slipping below 153.50. EUR/USD slipped to 1.1480 from 1.1520. EUR/GBP was stronger with UK Chancellor Reeves hinting at the need to raise taxes, rising to .8820 from .8780 as GBP/USD fell almost a big figure to 1.3020. EUR/CHF recovered from a dip below .83 as USD/CHF rose above .81 from below .8080. USD/CAD reached 1.41 from 1.4060 while AUD/USD slipped to near .6480 from .6520.