USD Firmer In Asia Alongside Higher Tsy Yields

The greenback benefitted from an uptick in U.S. Tsy yields as Asia-Pac participants faded yesterday’s richening in the Tsy space (and resultant weakness in the USD), with a firmer Hang Seng Index, linked to press reports pointing to a potential loosening of Hong Kong’s COVID restrictions, doing little to dent the early rally in the greenback. E-mini futures are weaker on the uptick in the USD, but off lows on the bid in the Hang Seng.

• Regional headline flow was limited, with Australian trade balance data having little impact on the AUD.
• The JPY finds itself at the bottom of the G10 FX table, with a surprise Japanese BoP current account deficit perhaps applying further pressure to the JPY, on top of the U.S. Tsy yield-derived USD bid.
• USD/CNH has coiled, with a lack of meaningful inputs observed. Participants now await the latest Chinese press briefing on COVID matters (due at 07:00 London) after the country outlined its home quarantine guidelines. The press conference is set to focus on COVID prevention & control measures.
• Central bank communique headlines on Thursday, with comments from ECB President Lagarde, as well as ECB’s de Cos & Villeroy, Riksbank’s Ingves & Floden and SNB’s Maechler all slated.