Asia Summary and Highlights 22 Jan

Asia Session

Over the weekend, Bloomberg reported that the US & UK are talking on intensifying targeting Houthis in Yemen after the latest incidents in the Red Sea. We also heard from Russia that they are blaming Ukraine for sabotaging certain energy facility in the Baltic area. However, such geopolitical tension does not seem to reverberate to the U.S. equities as they continue the strength from Friday after breaking all time high. Regional sentiment, on the other hand, are in the red. The AUD/USD reversed earlier gains to trade 0.13% lower at 0.6588, NZD/USD also 0.07% lower at 0.6111 while USD/CAD rose 0.12% on weaker oil.

The USD is trading slightly lower against major on Monday as U.S. Treasury yields are higher in front and lower at the far end. 10yr JGB yields are also lower. USD/JPY is trading 0.21% lower at 147.84. Elsewhere, EUR/USD is up 0.03% and GBP/USD is up 0.1%.

North American session
There was little FX movement of any note in the Friday North American session. The USD did start the session strong, gaining some ground across the board and particularly against the JPY with USD/JPY reaching a high of 148.54, but as equities built gains the USD ended the session slightly weaker. EUR/USD gains stalled ahead of 1.09 while GBP/USD advanced to near 1.27.  USD/JPY found support at 148 while USD/CAD fell from near 1.35 to below 1.3440,
University of Michigan confidence data was clearly on the strong side of expectations, but USD gains mostly preceded the data, and subsided after it. January’s gain to 78.8 from 69.7 was the second straight strong rise and the highest since July 2021. Inflation expectations edged slightly lower. December existing home sales however remained weak, -1.0% to 3.78m. The only other news of note was a 0.2% decline in November Canadian retail sales, but this had little impact.