EM ASIA CREDIT: AIA Group (AIA) - Solid FY results

USD/JPY is sitting off earlier highs (153.76), which marked highs from around late last week. We were last near 153.30, so still within recent ranges for the pair. The yen is marginally outperforming the likes of AUD and NZD. Precious metals are softer, led by silver declines, so may be helping at the margin. Lows for silver from late last week are holding though. US equity futures and cash Tsy yields are little changed.

• No specific requests from Takaichi to BoJ Gov Ueda (from yesterday's meeting) will be seen as a positive at the margin, while JGBs are showing a modestly positive bias as well. We have the 5yr debt auction later, as well as the Dec Tertiary Industry index (not typically a market mover).
• Also note via BBG: "BOJ Likely To Raise Key Rate In April, Ex-Board Member Says"  see the full link here. 
   

Both the AUD & NZD have drifted lower to start our session albeit within their recent ranges. The RBA minutes were released and just confirmed what the market already knew regarding its concern of rising inflation. The market will be keenly watching how risk opens the week in the US tonight.

• {AUDUSD Curncy} - 0.7067, -0.07%
• {NZDUSD Curncy} - 0.6030, -0.07%

• {AUDNZD Curncy} -  1.1720, +0.03%

   

The BBDXY range overnight was 1181.33-1183.44, Asia is currently trading around 1183. The USD is drifting sideways below 1185. How will risk open today in the New York session? if it starts to build on the pullback that started last week does the USD find a bid? The market is very bearish the USD so if we should get some form of a deeper correction in risk and the USD finds demand as a hedge, the market is not positioned for this. On the day, the first resistance remains toward the 1185-1187 area and then 1195 where I suspect we could see sellers return. A sustained break below 1175-1180 is needed to potentially signal the start of another leg lower. While the market waits for clarity around the pullback in risk the BBDXY looks to be stuck in a 1177-1187 range.

• “Credit Agricole Sees Dollar Support on ‘Fairly Strong’ US Flows. This week’s treasury data is likely to show that the latest speculation about rapid diversification out of the dollar may be overstated.” - BBG
• Financial Times - “Fund managers take most bearish stance on the dollar for a decade.”
• Walter Bloomberg on X: “DOLLAR SHORTS HIT 14-YEAR EXTREME. Dollar positioning turned the most negative in over 14 years in February, according to Bank of America’s latest FX and rates sentiment survey. Concerns about the Federal Reserve’s independence eased after President Donald Trump nominated Kevin Warsh as Fed Chair, but this failed to lift dollar demand or improve sentiment toward U.S. assets. Respondents cite further deterioration in the U.S. labor market as the key downside risk for the dollar.”
• The BBDXY Average True Range for the last 10 Trading days: 441 Points

Fig 1: BBDXY Daily Chart

Source: MNI - Market News/Bloomberg Finance L.P