There
was a whiff of risk-off during the session in Asia today. Flows were
into the US dollar and out of other major FX. USD/JPY was a bit of an
exception, not doing much at all. Adding to the sour tone were drops
for US equity index futures in Globex trade, with ES and NQ down
nearly half a per cent (as I post) and
retracing much of the gain they’d had on Thursday during regular
trading hours.
There
were no clear fresh catalysts for the moves, with some pinning the
moves on continued heightened fears of more central bank hikes (yields on US 2-years sat near highs last seen in March) yet to come. The
Bank of England raised its Bank rate by 0.5% on Thursday, greater
than the 25bp hike that was consensus expected but, given the recent
inflation and jobs data, not too much of a shock.
On
the data front, we had May inflation for Japan, with core-core (the
rate excluding food and energy) hitting another 40+ years high and
other measures remaining high also.
Mainland
China was on holiday again today (Hong Kong markets were back after
the Thursday holiday). The offshore yuan weakened, with USD/CNH rising
above 7.22 at one stage.
Asian
equity markets:
-
Japan’s Nikkei 225 -1.6%
-
China’s Shanghai Composite – out again today
-
Hong Kong’s Hang Seng -1.7%
-
South Korea’s KOSPI -0.8%
-
Australia’s S&P/ASX 200 -1%
USD/CNH: