ASIA SUMMARY

With major economic data releases due in London and Japanese GDP and Bank of Japan rate decision later this week, Asia played a waiting game. We saw EUR/USD continue to consolidate around the 1.3545 area. USD/JPY saw buying through the 120.50 level off of a worse than expected machine tool orders (-4.5% month over month vs. expected +1.5%) but failed after repeated attempts higher. EUR/JPY also rallied with USD/JPY through the NY session highs but found sellers as well after the Tokyo fix.

The much lower than expected Japanese machine tool orders was disappointing. Economics Minister Ota expressed concerns over the forecasted drop for April/June machine tool orders. However, while we initially saw JPY selling, USD/JPY and the JPY crosses are lower than when the number first came out. Some of the reaction may be due to continued concern about inflation in China as its recent reading came in at 3%. People’s Bank of China adviser Fan Gang also said that it may be better to let the Yuan appreciate sooner rather than later.

Upcoming Data Release (UK Session):

Germany: (2am EDT) Quarter over quarter seasonally adjusted GDP expected .2% vs. previous .9%.

France: (2:40am EDT) Quarter over quarter GDP expected .6% vs. previous .7%. (2:45am EDT) Month over month CPI expected .4% vs. previous .4%.

UK: (4:30am EDT) Month over month CPI expected .3% vs. previous .5%. Month over month RPI expected .6% vs. previous .6%.

EC: (5am EDT) Quarter over quarter seasonally adjusted Euro-Zone GDP expected .5% vs. previous .9%. (5:20am EDT) ECB’s Tumpel-Gugerell speaking in Frankfurt. (5am EDT) ECB’s Mersch speaks at forum in Dubai.