Europe Summary and Highlights 26 Jun
Into the weekend, corrective consolidation of overbought dollar still in play
NOK remains weighed though, if also slowed
Risk stays choppier, overall weighed off highs
European morning session
Into the end of the week, corrective consolidation action predominating as the market unwinds overbought conditions on the dollar.
EUR/USD is pulling back to test the previous 1.14/10 break. USD/CHF likewise eases back from the 0.81/25 high test through earlier in the week.
NOK remains pressured though, if also slowed - USD/NOK nudges a new high, albeit the last couple of sessions have been a bit more sideways and overlapping. Oil drops back to the lows after yesterday’s small bounce, -$2 ½ on the day.
Risk market remain whippier and overall weighed, Nasdaq future currently off around 1%. Nikkei posting -4% and Kospi -5% overnight showing how a lot more daily volatility has entered the system this week. To be seen if that translates into some spec dial back and so fuller price correction, or this is just heralding a period of wider, noisier, action.
Asia Session
Tokyo CPI remains capped by 2% with ex fresh food & energy at 1.9% y/y. Headline CPI for June arrived at 1.7% y/y while ex fresh food rose 1.6% y/y. It seems to suggest underlying inflation is gathering momentum with consumption recovery and energy cost being spread among business. USD/JPY is trading 0.12% lower at 161.60 as market participants are unsure where to go from here.
Major equities are all in the red on Friday. The move seems to be triggered by OpenAI delaying IPO but in fact it is fundamentally driving by Fed hawkish tilt and subsequent market participants positioning. AUD/USD is trading 0.32% lower at 0.6888. NZD/USD is trading 0.17% lower while USD/CAD slips 0.04%. Oil is lower this session so far. Else, EUR/USD down 0.01% and GBP/USD is up 0.04%.