AUD, NZD, CAD along with EUR and GBP all traded higher against the USD during the session here. US stock indexes traded higher also (Globex). Its difficult to point to a ‘smoking gun’ for the move during the session, both news and data flow were very light. Asia digested the Federal Open Market Committee (FOMC) minutes (January31/February 1 meeting). About the only information I gleaned from the minutes was that “a few members favoured a 50 bp hike”. We already knew that Bullard and Mester did, which is a couple. I’m guessing a ‘few’ is more than a ‘couple’ so there do seem to be a few more 50s around the Committee table. Regardless, Asia took ‘risk’ up.

We did get data from Australia today, an improvement in business investment (capex) in Q4 2022 vs Q3 and a solid outlook in the estimate ahead. We also had wages data out at the same time that showed wage growth is not indicative of any accelerating ‘wage-price’ higher inflation spiral. We’d already had similar indications from data just yesterday from Australia:

The PBOC set the onshore yuan reference rate today at the weakest for the yuan since January 4.

The Bank of Korea held its benchmark interest rate at 3.5%, as expected, the first on hold decision, by a very close vote indeed, after nearly a year of rate hikes.

Asian equity markets:

  • Japan’ was closed for a market holiday today

  • China’s Shanghai Composite +0.07%

  • Hong Kong’s Hang Seng +0.5%

  • South Korea’s KOSPI +1.1%

  • Australia’s S&P/ASX 200 -0.4%

usdyen 23 February 2023