European Summary and Highlights 28 Feb
The USD was generally slightly firmer through the European morning.
European morning session
The USD was generally slightly firmer through the European morning. EUR/USD briefly dipped below 1.08 before bouncing to 1.0815, down around 10 pips from opening levels. USD/JPY was up just around 5 pips to 150.65, while the AUD and NZD stayed soft after overnight weakness, losing around 20 pips each. The NOK was a little softer as well, with EURNOK up 2 figures to 11.45, and EUR/SEK also gained slightly to 11.20. The CHF held its own against the USD, with EUR/CHF dropping around 15 pips to 0.9515.
There wasn’t a great deal of significant news in the session. There were several Swedish releases, but none had a major impact, with the economic tendency survey edging marginally lower in February after a strong January recovery. The January trade balance did show a big rise, but due to weak imports rather than strong exports.
The European Commission survey was a little on the weak side, with declines in both industrial and services sentiment and the business and consumer survey index, but consumer confidence rose slightly and the business climate index was unchanged. EUR/USD had dipped below 108 ahea dof the data but recovered afterwards.
Asia session
In the February meeting, the RBNZ has kept rate unchanged with 2024 inflation forecast revised higher and OCR forecast revised lower. The hawkish speculation (2 rate hikes) from TD and ANZ are disappointed for the RBNZ recognized higher inflation in 2024 but does not see it to be significant in affecting bring inflation back to target in 2025. NZD/USD took a beating when RBNZ almost saying there will be no more hike and see the pair dropped 0.97% to 0.6110.
The latest Australian monthly inflation came in at 3.4% y/y vs. 3.6% expected. It continues to support RBA's decision to keep rates on hold. Regionally, we have headlines that the Chinese developer Country Garden Holdings said a liquidation petition has been filed against it and Hong Kong’s budget says that all demand side property cooling measures will be abandoned. Regional sentiment remains soft, though partial losses have been recovered. AUD/USD is trading 0.42% lower at 0.6516. U.S. Treasury Yields slipped across the curve while JGB yields outperform. Yet, USD/JPY is trading 0.08% higher at 150.62 as USD is broadly higher so as a comment from BoJ official saying that trend inflation is not high enough. Elsewhere, EUR/USD is down 0.15% and GBP/USD is down 0.21%.