European Summary and Highlights 04 Mar
USD/JPY gained a little ground through the European morning, and EUR/USD was also a touch firmer, both rising around 10 pips from opening levels.
European morning session
USD/JPY gained a little ground through the European morning, and EUR/USD was also a touch firmer, both rising around 10 pips from opening levels. EUR/JPY consequently gained around 25 pips from opening levels. GBP kept pace with the EUR, but the EUR gained some ground against the scandis, rising a couple of figures against both.
There was little news during the session other than Swiss CPI, which came in slightly above expectations at 1.2% y/y (consensus 1.1%), initially triggering a 20 pip drop in EUR/CHF to 0.9560. But CPI was still lower from January (1.3%) and remains well below the level expected by the SNB after the sharp January drop. So after the initial drop, EUR/CHF fully recovered to finish the session around 10 pips higher near 0.9590, with USD/CHF little changed.
Asia session
The OPEC+ has agreed to extent output cuts by another quarter with Saudi Arabia's extra voluntary cut to end in June 2024. The decision will keep supply at current level while the season is heading into summer. Oil gap and continued to trade higher at Monday's open in reaction to the headline but has since erased most of their gains yet the gap is not closed. USD/CAD gap around 10 pips lower and has reversed losses to trade 0.05% higher at 1.3562.
As we come closer to the all important spring wage negotiation, any headlines will be market sensitive as they may sway BoJ's policy decision. Japanese media Mainichi and Kyodo reporting Japan gov't mulls declaring official end to deflation, which initially saw a dip in the pair but does not seems to have a lasting impact because it would be more a move of gesture to prepare the public for a move in monetary policy. The direction changed as session progress, U.S. Treasury Yields are higher while JGB yields lower. USD/JPY is now trading 0.14% higher at 150.26.
Australia Melbourne Institute Inflation for February came in at -0.1% m/m lowered from +0.3% in January. It should support RBA's rate path to keep it on hold. AUD/USD is down 0.1% to 0.6518, NZD/USD 0.14% lower at 0.6098. Elsewhere, EUR/USD and GBP/USD are up 0.08%.