ASIA SUMMARY

Asia saw healthy ranges after the US FOMC rate decision and in front of tomorrow’s European Central Bank and Bank of England interest rate decisions. We first saw the JPY crosses move higher as USD/JPY rallied to test the 120.25 area and EUR/JPY broke through 162.60. However, we saw JPY cross selling into the Tokyo fix, erasing earlier gains. EUR/USD traded higher from the NY close as it is finding support around the 1.3520 area.

Australia released employment data which came in much better than expected. April employment came in at 49.6k vs. 12.5k consensus. We saw AUD/USD pop sharply through .8300 to settle around .8320 area and is holding its gains so far.

We also heard comments from Fukui that were in line with previous rhetoric. He said that the pace of rate increases will be gradual and based on the improvement of the economy. Earlier in the year the Bank of Japan increased interest rates but without strong economic data out of Japan, there has not been much speculation about the next rate increase.

Upcoming Data Release (UK Session):

Germany: (2am EDT) Month over month Wholesale Price Index expected .5% vs. previous .5%.
Japan: (2am EDT) Machine Tool Orders.

UK: (4:30am EDT) Month over month Industrial Production expected .4% vs. previous -.2%. Month over month Manufacturing Production expected .5% vs. previous -.6%. UK Trade Balance. (7am EDT) Bank of England announces rates.

EC: (7:45am EDT) European Central Bank announces rates.