EUR, AUD, NZD, GBP all rose against the USD during the session here. The moves have varied by currency, of course, but some of them have been large by usual Asia FX range standards. The collapse for bonds and equities has thinned out liquidity, even more so in this pre-FOMC session. This has exacerbated the moves across the FX majors board.

USD/JPY and USD/CHF have lost some ground also. USD/JPY did pop above 135.50 early in the Asian morning but subsequently retraced back to briefly dip under 135.00. USD/CAD is down a little also.

The data focus for the session was on China. May retail sales declined, but not as badly as expected and not as much as in April. Industrial output surprised with a positive and a beat.

In Australia we had authorities give an increase in the minimum and award wages. Up 5.2% and 4.6% respectively. Business lobbyists warned, of course, that these would fuel inflation and further rate rises. But, Reserve Bank of Australia Governor Lowe had warned of much higher inflation to come, and higher interest rates, the previous evening in an interview on the TV in Australia so no one paid too much attention to the lobbyists.

We head into the June Federal Open Market Committee (FOMC) meeting with consensus calling for a 75bp rate hike, sharply higher than the 50bp consensus earlier in the week. ICYMI:

Just as a head up, the journalist who kick-started the move towards a 75bp consensus has tweeted out a bit of a hedge.

wsj fomc nick timiraos 15 June 2022