Europe Summary and Highlights 23 September

European morning session

The USD traded lower against the JPY through the European morning, dropping 20 pips to 147.60, and against the AUD, with AUD/USD rising 15 pips to 0.6605, but only edged very slightly lower against the EUR, which pushed up just above 1.18. EUR/USD dipped early on in response to weaker than expected French PMI data, but stronger German PMI data reversed the downmove.

EUR/GBP move lower in early trading, opening at 0.8735 but trading down to 0.8720 ahead of the UK PMI data, but the weaker than expected outcome triggered a sharp rise back to 0.8740 by the end of the morning.

EUR/SEK initially traded slightly higher when the Riksbank announced a 25bp rate cut at today’s meeting, as a cut had only been around 35% priced in. But EUR/SEK traded lower after that through the morning, finishing the session 5 figures lower at 10.99. The Riksbank’s decision to cut was accompanied by an indication that this was seen to be the last cut, and with the first rate hike projected near the end of 2026 this was seen as SEK positive.

Asia session

As the LDP leadership election coming in less than two weeks, the contenders are beginning their show. Most contenders are tilted towards more easing with top contender Takaichi said extra tax revenues should be used to ease the rising cost of living and that bond issuance may be needed if necessary while Koizumi arguing that new spending should be funded by higher revenues and cuts to wasteful outlays. USD/JPY is trading 0.03% higher at 147.75.

Regional equities in China and Hong Kong are underperforming Japanese equities while U.S. equities performing individually. USD is trading broadly higher against majors as market participants wait for Powell's speech. AUD/USD is down 0.15% at 0.6589, NZD/USD is trading 0.29% lower at 0.5851 while USD/CAD rises 0.05%. Else, EUR/USD and GBP/USD is down 0.01%.