ASIA SUMMARY

While Asia is back from Golden Week, it looks like London is out for May Day which may have kept most pairs in a holding pattern for our session. We saw general dollar weakness following the US’s disappointing employment data as non-farm payrolls came in at 88k vs. expectations of 100k. EUR/USD has regained the 1.3600 handle but has had limited follow through so far. USD/JPY is trading below the 120 level and is having trouble mounting any rally.

We also heard from Chinese Central Bank Chief Zhou Xiaochuan make comments about the Chinese stock market. The Shanghai Composite Index has continued to push to all-time highs and he is concerned about the impact should the stock market bubble pop. Any significant developments in China could have widespread consequences for the JPY and even the US dollar.

Other Asian equity markets continue to trade higher as the Nikkei was up 1.54% at midday as they play catch up to the Dow’s strength. Despite this, we are seeing some divergence in the carry trade as EUR/JPY’s rally has slowed and GBP/JPY remains capped below the 240 level.

Upcoming Data Release (UK Session):

Japan: (1am EDT) BOJ Monetary Policy Meeting Minutes for March

Switzerland: (1:45am EDT) Seasonally adjusted unemployment rate expected 2.8% vs. previous 2.9%.

EC: (5:45am EDT) EU Releases Growth Forecast for Euro Region.

Germany: (6am EDT) Month over month seasonally adjusted factory orders expected -.6% vs. previous 3.9%.