European Summary and Highlights 5 Apr

European morning session

A quiet pre-employment report European morning saw a minor risk recovery after the losses seen for the riskier currencies overnight. EUR/USD and AUD/USD both gained around 15 pups to 1.0840 and 0.6585 respectively, while USD/JPY and EUR/CHF also gained around 15 pips to 151.40 and 0.9785 respectively. USD/CAD and EUR/NOK also fell 15 pips and 3 figures respectively, reflecting the risk positive tone.

Datawise, we saw German factory orders which were a little weaker than expected at 0.2% m/m, but this was a minor miss after extreme volatility in previous months and had no impact. Eurozone retail sales were also slightly weaker than expected at -0.5% m/m, although back revisions meant the y/y decline was smaller ta  expected at -0.7%.

Asia session

USD/JPY followed the overnight weakness led by concern of geopolitical tension escalation between Iran and Israel. It briefly dipped below 151 figure to 150.81 in the Hong Kong opening hours but was reversed as session progress. Despite cabinet officials and Ueda's verbal intervention attempt, market participants seem to be focused on Ueda's remark on "Impact of past rises in import costs on Japanese inflation likely to dissipate", suggesting potentially lower inflation. U.S. Treasury and JGB yields are rangebound for the session and see USD/JPY slip 0.06% to 151.23.

Headline crossed the wire of potential escalation between Israel and Iran and has dent sentiment in late New York session and was being followed through in Asia session. There has since been little update but regional sentiment remains weak and oil hovering at high. AUD/USD is down 0.27% to 0.6569, NZD/USD is also down 0.27% to 0.6009 while USD/CAD is up 0.22% 1.3572 as oil slip a few cents. Else, EUR/USD is down 0.09% and GBP/USD is down 0.13%.