European Summary and Highlights 16 Feb
GBP initially recovered some of the ground lost in the last couple of days after the release of the stronger than expected 3.4% rise in retail sales in January, reversing the 3.3% decline seen in December.
European morning session
GBP initially recovered some of the ground lost in the last couple of days after the release of the stronger than expected 3.4% rise in retail sales in January, reversing the 3.3% decline seen in December. But the GBP rally as short-lived no doubt because while the data was stronger than expected, the volatility of the last couple of months says more about weather and seasonal adjustment than underlying trends, and EUR/GBP settled back at opening levels near 0.8550.
Otherwise there was a mild risk positive bias with EUR/USD and AUD/USD gaining around 0.1% and USD/JPY also up around 0.1%. This took EUR/JPY up to its highest for a month just below the January 19 high, which was itself the highest since November. Scandis were also firm, with both EUR/SEK and EUR/NOK dropping around 3 figures, but without any obvious trigger, with Swedish January unemployment data in line with consensus at a seasonally adjusted 8.2%.
Asia session
The ebbs and flow of USD has seen the USD/JPY going up and down the 150 handle. FX intervention has been an effective deterrent for speculators stretching their position against the JPY but the latest verbal intervention from Suzuki hints inaction as he said weak JPY has its pros and cons. While this is understandable for there should be a fundamental shift soon in the BoJ monetary policy, this softness seems to have open the green light for a slow grind upwards in USD/JPY. Still, any sharp spike will be met with potentially intervention as it is the most unfavorable for the BoJ, compared to a slow weakness in the JPY. U.S. Treasury Yields are higher across the curve while JGBs yields are also in the green. With broad USD strength, USD/JPY recaptured the 150 handle and is trading 0.29% higher at 150.33.
Risk sentiment is performing individually with regional equity indexes mostly positive and U.S. 3 major equity indexes down a tad. Yet, the broad strength of USD has outweighed positive mood and see AUD/USD down 0.16% to 0.6514, so as NZD/USD down 0.15% to 0.6096 while USD/CAD rose 0.15%. Elsewhere, EUR/USD is down 0.13% and GBP/USD is down 0.17%.