Europe Summary and Highlights 14 October
The USD was generally firmer through the European morning.
European morning session
The USD was generally firmer through the European morning. EUR/USD fell 30 pips to 1.1555, while USD/JPY rose 30 pips to 152.05. GBP was the weakest major currency, with EUR/GBP rising 25 pips to 0.8710 after the UK labour market data. Although the headline data was broadly as expected, with average earnings growth excluding bonuses u 4.7% y/y, weakness in private sector pay growth, a rise in the unemployment rate and a further modest decline in employment triggered GBP weakness.
Commodity currencies moved broadly in line with the EUR, but the NOK was the weakest currency on the morning, with EUR/NOK up 5 figures to 11.75. There was no obvious trigger for NOK weakness, but it was likely playing catch up with the weakness seen in the riskier currencies overnight.
The German ZEW survey was weaker than expected, with economic sentiment rising less than expected and the current conditions index the lowest since May.
Asia session
We are hearing another round of verbal intervention as the JPY got no break in the beginning of the week. It seems the only savior for JPY would be Trump occasional rant as we do not see any significant impact from Japan FM Kato's remark on one side JPY moves. USD/JPY is trading 0.24% lower at 151.88 with both the U.S. Treasury and JGB yields lower.
The September RBA minutes have provided little new detail as they remain data dependent and sees no urgency in delivering another cut. The broad risk sentiment is poor with Nikkei leading losses despite U.S.-China had held work level trade talks on Monday. AUD/USD is trading 0.57% lower at 0.6477, NZD/USD is trading 0.46% lower at 0.5699 while USD/CAD rises 0.05%. Else, EUR/USD is up 0.14% and GBP/USD is up 0.09%.