ASIA SUMMARY

We had the release of the NZ Retail Sales for February at the start of Asia. The number came in much higher than expected at 1.9% vs. the 0.5% consensus. This caused both Kiwi and NZDJPY to gap about 20 pips on the news. The much stronger number increases the likelihood of an additional hike by the RBNZ, and should only provide additional support to an already bid Kiwi. While that above mentioned was the only release data wise, we saw a familiar theme this week as once again the dollar sold off right after the Tokyo fix. EURUSD breached yesterday’s NY highs and then continued its momentum over the much talked about 1.3510 level. Eventually the pair ran into offers ahead of 1.3530. Cable finally cracked a double top in the 1.9820 area. The follow through was limited as there are likely offers ahead of 1.9850 that could be barrier related. USDJPY, which has traded bid most of the week, finally came under greenback selling pressure as it too managed to break the lows posted in NY yesterday. The final currency to note has been AUDUSD. We saw the pair take out the barrier at .8300 and never look back. While the initial figure break there looked suspect in an early thin Asian market, the pair remained relentlessly bid as it continues to make new multi-year highs.

With the G7 meeting coming up this weekend, traders should be on the lookout for additional comments from Central Bank leaders going into the Sunday night (EST) open in Asia. We heard earlier today European Central Bank President Jean-Claude Trichet speak about the Japanese Yen, commenting on how it doesn’t reflect the strength of the economy, spurring the USDJPY slump going into this weekend and as such, additional comments will set the tone for coming days.

Upcoming Data Release (UK Session):

4/13

5:00

EC

Euro-Zone Ind. Prod. sa (MoM)

FEB -0.20% 0.40%

4/13

5:00

EC

Euro-Zone Ind. Prod. wda (YoY)

FEB 3.70% 4.10%