Asia Wrap: Investors may have already squeezed all the rate cut juice out of Fed Williams (NYSE:WMB) comments.
USD selling was the central theme in New York Thursday after comments from New York Fed President Williams, but this trend shifted during early Asia trading after the New York Fed walked down the dovish remarks. The market markets have traded very anxiously, Treasury Mnuchin comments notwithstanding, but given the euro only bounced to 1.1285 as the rates markets went full out Fed policy bazooka pricing mode there wasn’t that much USD selling versus the Euro in particular.USD Asia turned dollar bid as trader took advantage on USD/SGD and USD/TWD dip to add to short positions
The CNH funding squeeze intensified more than we had expected, so there has been a substantial bid under USD/CNH all session which has had a tempering effect across Asia EM currencies.
Global equities are looking a bit "toppish" as traders have turned better sellers suggesting investors may have already squeezed all the rate cut juice out of Fed Williams comments.
With a bid back under the dollar, gold continues to sell off on profit-taking and weaker longs heading for exit ahead of the weekend.
But no matter how you dissect Fed Williams comments when combined with an equally dovish Fed Clarida if it looks like a dove and coos like a dove, its probably a dove.