Trading in Asian equities was thin and largely directionless outside Japan. The Nikkei is down 1.0%, reacting to USDJPY edging lower to 98.80 after Friday’s post-payrolls drop. However, S&P futures are off only 0.1%, Shanghai is up 0.2% and Kospi is off 0.2%.
The Antipodeans have weakened sharply against the dollar, led by the NZD. News that China has restricted some imports of dairy products from New Zealand after the latter’s dairy cooperative announced discovery of some tainted milk products had entered the distribution chain pushed NZDUSD down 1.7% at the open. However, spot has recovered slightly to 0.7760 from Friday. AUDUSD followed, falling 0.4% to 0.8866, in part in response to weaker than expected retail sales.
In contrast, the USD weakened against most EM Asia currencies. USDKRW gapped lower on the open and has dropped 0.8% to 1115.3 followed by a 0.4% fall in USDMYR to 3.2436. USDINR edged 15pips lower on modest selling by India’s central bank. USDCNY fixed 50pips lower to 6.1767.
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Credit Suisse