Europe Summary and Highlights 8 May
USD/JPY gained nearly a big figure to near 145 in the European morning as equity markets continued to advance.
European morning session
USD/JPY gained nearly a big figure to near 145 in the European morning as equity markets continued to advance. The USD also gained elsewhere, but to a lesser extent, with EUR/USD losing 15 pips to 1.1285, GBP/USD down 45 pips to 1.3275, AUD/USD down 30 pips to 0.6410, and USD/CAD up 45 pips to 1.3885.
The Riksbank and Norges Bank left their policy rates unchanged as generally expected. EUR/SEK rose modestly to 10.92, while EUR/NOK was unchanged on the session at 11.70. German industrial production was much stronger than expected in March, rising 3.0% m/m, but this had no FX impact.
Gains in equities look to be related to Trump’s claim of a “major” trade deal to be announced today. Reports suggests this is a deal with the UK, and while most expect this to be less significant than Trump suggests, equities appear to be benefiting from expectations that this is a sign of things to come.
Asian session
Trump said on his Truth Social that he will be announcing a major trade deal on Thursday but WSJ reported that it will only be a framework of trade deal with UK. China, on the other end, kept up with their harsh words and says China will not compromise its principles in trade talks. USD/JPY is trading 0.15% higher at 144.01 with U.S, Treasury outpace JGB in yields.
The risk mood is broadly positive on Thursday after Trump's preview on potential trade deal. Sentiment remains upbeat despite WSJ poured some cold water on the details. Both the U.S. major and regional equity indexes are all in the green. AUD/USD is trading 0.28% higher at 0.6444 on the positive sentiment, NZD/USD also 0.32% higher at 0.5959 while USD/CAD is unchanged. Else, EUR/USD is up 0.02% and GBP/USD is up 0.11%.