European Summary and Highlights 13 Feb
A weaker CHF and a stronger GBP were the main features of the European morning session.
European morning session
A weaker CHF and a stronger GBP were the main features of the European morning session. The CHF weakened after January Swiss CPI came in much weaker than expected at 1.3% y/y against market consensus of 1.7%. EUR/CHF rose more than half a figure to a high of 0.9493 before dropping back to 0.9480.
GBP was stronger after slightly stronger than expected labour market data, which saw average earnings growth fall to 5.8% (including bonuses), slightly less than expected, and the unemployment rate fall sharply to 3.8% helped by a decline in the active labour force. EUR/GBP fell around 30 pips but held just above 0.85.
Otherwise, the USD finished the session not much changed against the EUR, JPY and AUD after reversing some initial gains.
Asia session
The RBNZ inflation expectation has been revised lower. 1yr expectation is lowered to 3.22% from 3.6% and 2yr to 2.5% from 2.76%. It is not surprising given the current inflation dynamics but seems to have smashed hawkish speculations sparked by ANZ last week. NZD/USD dropped 0.38% to 0.6106, AUD/USD also 0.2% lower at 0.6517 while USD/CAD rose 0.06%.
It was reported that Houthi militants had launched two missiles from Yemen towards commercial vessels in the Red Sea. There has been minimal damage but continue to highlight the geopolitical uncertainty in the area. U.S. Treasury Yields are lower in front and close to unchanged at the back while JGB yields also reopened little changed. The broad risk sentiment remains indecisive before the all important U.S. CPI. USD/JPY is 0.14% higher at 149.55. Elsewhere, EUR/USD is down 0.05% and GBP/USD is down 0.09%.