Europe Summary and Highlights 20 November
The USD was generally stronger through the European morning.
European morning session
The USD was generally stronger through the European morning. EUR/USD lost 40 pips to 1.0550, while USD/JPY rose 40 pips to 155.80, extending overnight gains. GBP outperformed, helped by stronger than expected UK CPI data. This showed headline CPI rising back to 2.2% y/y n October after the drop to 1.7% in September, with the rise driven mainly by higher gas and electricity prices. EUR/GBP dropped 20 pips to 0.8330, but GBP/USD still edged lower by the end of the morning, trading down 20 pips to 1.2660 after hitting a high of 1.2715 after the data.
Asia session
The Japan October headline trade balance has come in lower than estimate but details beats in both export and import at 0.4% and 3.1% y/y respectively. While both data point beat estimate, the import beat is more critical as the BoJ would like to see domestic consumption improve on higher wages. USD/JPY continues to trade 0.24% higher at 155.03. The lack of verbal intervention did not help the fall in JPY while U.S. Treasury yields are performing individually and JGB yields higher.
As the PBoC left its interest rate unchanged, regional equities do not seem to bother as there is little expectation of another cut. The Westpac leading index suggests the Australian economy is showing more growth momentum since November 2023. AUD/USD is trading 0.06% lower at 0.6527, NZD/USD is 0.07% lower at 0.5908 while USD/CAD is unchanged. Else, EUR/USD is down 0.02% and GBP/USD is up 0.04%.