European Summary and Highlights 12 Dec
The USD was generally weaker through the European morning.
European morning session
The USD was generally weaker through the European morning. EUR/USD gained 35 pips from 1.0770 to 1.0805, helped by a stronger than expected ZEW survey, and USD/JPY initially rose but fell back from 145.60 to the opening level of 145.25. GBP/USD was also net little changed on the morning at 1.2580, but fell back initially on weaker than expected UK labour market data. GBP/USD hit a low of 1.2543 before bouncing, and EUR/GBP traded up to 0.8590 from an open of 0.8560. USD/CAD bucked the weaker USD trend by trading up around 15 pips to 1.3570. EUR/CHF moved higher from 0.9440 to 0.9470.
The UK labour market data was generally on the weak side. The official average earnings data showed a slowing to 7.3% y/y from 7.8% in headline earnings growth in the 3 months to October, while including bonuses the decline was even larger, to 7.2% from 8.0%. The more up to date (and possibly more reliable) HMRC data showed a decline in the y/y growth rate in earnings of payrolled employees to 5.3% in November. Employment data was also soft, with another rise in the claimant count in November, and HMRC payrolled employment data showed a small decline of 13k on the month.
The German ZEW sentiment index was stronger than expected at 12.8, its highest since March, but the current conditions index remained close to the lows.
Asia session
USD is trading broadly higher on Monday's Asia session, following up on the Friday's NFP momentum. U.S. Treasury Yields are higher across the curve while JGBs are closing the opening gap. There is little headline from the BoJ before their meeting next week but most market participants are anticipating at least a change in forward guidance in the coming meeting. USD/JPY is trading 0.46% higher at 145.63.
Over the weekend, we have the Chinese CPI came in much lower at -0.5% y/y vs -0.1% expected. It came as a surprise as there has been more iron ore import from China recently. The Chinese Yuan weakened to level last seen in late November and in the process dragged the Antipodeans lower. Regional equities in China and HK sunk while global equities are performing individually. The AUD/USD is down 0.33% to 0.6553, NZD/USD is 0.19% lower at 0.6110 while USD/CAD rose 0.2% to 1.3604. Elsewhere, EUR/USD is 0.04% higher and GBP/USD is 0.09% lower.