Asia Summary and Highlights 21 March

Asia Session

After the placeholder BoJ meeting on Wednesday, we have another elevated National CPI on Friday. Headline came in at 3.7%, down from January but still much higher than average. While ex fresh food came in at 2.9% and ex fresh food & energy at 2.6% may suggest a portion of inflation is transitory, the underlying strength in CPI cannot be denied. USD/JPY is trading 0.49% higher as there has been no urgency from the latest tone of BoJ officials.

Headlines are scarce on Friday's Asia session and we are seeing a more balanced start in the equity space until Asia noon, when we sell a wave of sell off in the Chinese and Hong Kong equity market. U.S. equities are faring better and USD is trading broadly higher against major. U.S. Treasury yields are also higher across the curve. AUD/USD is down 0.23% to 0.6288, NZD/USD is down 0.15% to 0.5749 while USD/CAD rose 0.07%. Else, EUR/USD is down 0.17% and GBP/USD is down 0.24%.

North American session

GBP/USD saw a marginal bounce on an 8-1 BoE vote for no change, with only one dissenting dive rather than two, but with the statement fairly neutral the bounced was quickly erased and GBP/USD stabilized near pre-meeting levels around 1.2960. EUR/USD was also little changed, after recovering from a dip to 1.0825 and returning to 1.0850. AUD/USD was also quiet, but edged up to 0.63. 

US data saw a modest rise in initial claims to 223k from 221k, and a modest dip in the Philly Fed manufacturing survey to 12.5 from 18.1, but these are still healthy levels. Later an unexpected 4.2% rise in existing home sales was seen. Equities recovered from an early dip but tuned negative in the afternoon. USD/JPY saw modest early gains but stalled ahead of 149. USD/CAD slipped to 1.4315 after an early advance to 1.44, the bulk of the movement coming before BoC Governor Macklem stated that policy would have to be less forward looking due to heightened uncertainty.