Europe Summary and Highlights 7 October
Mild risk aversion was the main theme of the European morning, with equities generally moving lower.
European morning session
Mild risk aversion was the main theme of the European morning, with equities generally moving lower. The JPY and CHF both made small gains and GBP and the AUD fell back. USD/JPY lost around 10 pips to 148.30, while EUR/CHF fell 20 pips to 0.9395. Meanwhile EUR/GBP rose around 25 pips to 0.8390 and AUD/USD dropped 15 pips to 0.6785. EUR/USD was very marginally lower at 1.0960.
The only data of note during the session was the German August factory orders data, which was much weaker than expected, falling 5.8% m/m. However, this followed two months of strong gains, and the July increase was revised up to 3.9%, so the 3m/3m trend actually improved. EUR/USD wasn’t really affected. Eurozone retail sales rise 0.2% in August, in line with consensus.
Asian session
USD/JPY rose above 149 in early Asia to 149.12 as follow through momentum of stronger NFP pushes the pair higher. The USD/JPY has gained significantly since the end of September and seems to have drawn the attention to the Japanese officials and we are hearing some verbal intervention on Monday's Asia session. USD/JPY is trading 0.06% lower at 148.56 as JGB yields are outperforming U.S. Treasury Yields.
The Australian private inflation survey for September came in at 0.1% m/m versus -0.1% prior. It doesn't change the broader Australian inflation picture where gradual moderation is expected. Regional sentiment remains vibrant and is supporting the Aussie. AUD/USD is trading 0.1% higher at 0.6800, NZD/USD is up 0.02% at 0.6159 while USD/CAD rose 0.11% as oil slips half a dollar. Else, EUR/USD is down 0.07% after closing the small opening gap once and GBP/USD is down 0.11%.