European Summary and Highlights 24 Feb

European morning session

EUR/USD and particularly EUR/JPY made gains through the European morning session. EUR/USD edged up to 1.0845 from an open around 1.0820, while EUR/JPY gained more than half a figure to 163.40, with USD/JPY up 20 pips to 150.65. There was no news of any real note, and also not much movement in yields or equities, although US equity futures were slightly higher.

Other currencies were mixed against the USD. The EUR made general gains, with EUR/GBP rising 10 pips, but GBP/USD rose slightly, while AUD/USD was modestly lower. EUR/CHF was little changed with SNB sight deposits recording a small rise in the latest week.

Asia session

TD joined the club to call for RBNZ hikes later this week, along with ANZ, citing the upward revision of 2yr household inflation to 3.2% from 3% would be an early indicator that the RBNZ would like to hike. However, this is not the number we believe would sway the RBNZ back into motion as this data is a household survey, not the RBNZ forecast. For RBNZ to tighten again, we would first look for a significant upward revision in RBNZ's inflation forecast. On Monday morning, the NZD/USD is being dragged by soft regional sentiment in HK and China and is seen trading 0.44% lower at 0.6170, AUD/USD also 0.13% lower at 0.6555 while USD/CAD rose 0.02%. 

U.S. Treasury Yields are lower across the curve, so as JGB yields and see USD/JPY erasing early losses to trade unchanged at 150.48. Elsewhere, EUR/USD is up 0.03% and GBP/USD is down 0.06%.