European Summary and Highlights 15 Jan

European morning session
The USD moved higher in a quiet European morning session. EUR/USD fell 25 pips to 1.0935,while the AUD was the weakest performer, falling around 0.5% from 0.6690. Other risky currencies broadly matched the EUR decline, while the JPY and CHF slightly outperformed, thughboth also lost a little ground against the USD.
There wasn’t a great deal of news. Swedish CPI was a little stronger than expected in December, with the targeted CPIF measure at 2.3% against the market consensus of 2.2%. However, there were big base effects, which mean this y/y rate was a lot lower than the 3.6% in November. The SEK initially edged a little lower on the news, but finished the morning little changed against the EUR. 
Otherwise, another weak Eurozone industrial production number, falling 0.3% m/m on November, saw the y/y rate decline to -6.8%, equalling the post-pandemic low. However, the Eurozone trade balance was in larger surplus than expected at EUR20.3bn In November, with the seasonally adjusted balance of 14.8bn the best since 2021.
Swiss sight deposits showed an unexpectedly large rise of CHF7.4bn in the latest week, the largest rise for 6 months, possibly indicating some SNB buying of FX.
Asia session
Houthis fired an anti-ship cruise missile at a US Navy ship that was hot down by a U.S. fighter jet near the coast of Yemen and has not done any harm. This no doubt further escalates the geopolitical tension in the area as it is hard to see either the Houthis and U.S. to back down from the scenario. While we hope there will be less conflict, risk sentiment will remain on its toes as more U.S. military action will have a domino effect on the global scale. Right now, the market seems to be numb towards such headline and does not see the risk asset being affected and global equity indexes in the green. At the same time, 10yr JGB yields have broken below December low and 2yr yields briefly dipped below 0%, a level last seen in July. The yield differentials once again pressure the JPY and see USD/JPY trading 0.28% higher at 145.28.
The PBoC kept MLF rate at 2.5% and disappointed certain doves looking for a 10bps cut. With commodity prices soft, AUD/USD found little support and is trading 0.04% lower at 0.6683, NZD/USD slipped more by 0.25% lower at 0.6225 while USD/CAD fell by 0.03%. Elsewhere, EUR/USD is 0.14% higher and GBP/USD unchanged.