Europe Summary and Highlights 28 October
The USD was marginally softer in a quiet European morning session.
European morning session
The USD was marginally softer in a quiet European morning session. GBP was the worst performer, with EUR/GBP making new highs for the year at 0.8765, its highest since November 2023. The trigger for GBP weakness wasn’t clear. Weaker than expected BRC shop price data overnight may have helped, but UK yields were only slightly lower, and spreads were little changed. The JPY was slightly the best performer, testing towards the 151.75 low seen in Asia after an early bounce, but still holding above that low.
EUR/USD fell back a little early on, but returned to opening levels by the end of the morning. The Gfk German consumer climate index for November came in weaker than expected, but the Italian business confidence index was a little stronger than consensus. EUR/NOK was 2 figures higher at 11.66, perhaps helped by lower gas prices.
Asia session
All eyes were on the meeting between Trump and the new Japan PM Takaichi. Takaichi is speaking highly of Trump and seems to have gained the seal of approval from Trump as it reminds him of his "friend" Abe. They are also expected to sign a joint agreement on rare earths but details are lacking. USD/JPY is trading 0.44% lower at 152.21.
The market is mostly rangebound for market participants taking a breather after a terrific start for major equity indexes. Chinese and Hong Kong equities are outperforming their Japanese and U.S. peers. The USD is trading broadly weaker against majors. AUD/USD is trading 0.11% higher at 0.6563, NZD/USD is trading 0.2% higher at 0.5780 while USD/CAD slips 0.04%. Else, EUR/USD is up 0.16% and GBP/USD is up 0.2%.