European Summary and Highlights 10 June

European morning session

USD/JPY and GBP/USD both slipped a little lower in the European morning, but EUR/USD was little changed. The JPY gains were helped by some weaker equity market performance, particularly in France, where Macron’s decision to call parliamentary elections helped knock the stock market lower. But EUR/USD didn’t fall any further after weakness late in Asia. USD/JPY fell around 20 pips to 156.90, while GBP/USD lost around 15 pips to 1.27.

Scandis were also steady after mixed data. Norwegian headline CPI was weaker than expected at 3.0% y/y but core inflation was a little above consensus at 4.1% y/y. Swedish April GDP was weak at -0.7% m/m, although this data is volatile and prone to revision.

Asia session

The Japan Q1 GDP has been revised slightly higher from preliminary figure q/q remains at  -0.5% but annualized slipped to -1.8% from -2%. The slack in consumption seems to have raised eyebrows within the Japanese government and could be seen from "leaks" of the Japanese annual economic blueprint. However, we do not see such data to significantly derail BoJ's tightening plans as inflation will rebound in the coming months on accelerated wage hikes. If BoJ missed the window, they maybe stuck for a longer while. USD/JPY is trading 0.26% higher at 157.09 with both the U.S. Treasury and JGB yields higher.

As the Chinese, Hong Kong and Australia market are observing respective holidays, risk sentiment is tilted towards the positive side. AUD/USD is trading 0.19% higher at 0.6592, NZD/USD is up 0.07% while USD/CAD also rose 0.03%. EUR/USD saw an early gap lower and never closed the gap in the Asia session, mainly driven from political uncertainty in France snap election and further uncertainty within the EU. GBP/USD is also down 0.03%.