Europe Summary and Highlights 23 Apr

European morning session

EUR/USD and GBP/USD both made some gains after the European PMI data, but these were nearly fully reversed and both were little changed by the end of the morning session. USD/JPY was slightly higher, breaking marginally above the new 34 year highs reached yesterday at 154.86 before edging a tad lower. Otherwise, the USD made modest gains against the commodity currencies.

The European PMI data was stronger than expected, with the Eurozone composite index rising to 51.4 in April from 50.3 in March, its highest since June last year. The UK composite index also matched last June’s high of 54.0. All the strength was in services, with the manufacturing indices for both the Eurozone and the UK coming in both below expectations and below the March level. The data triggered modest gains in yields but currency gains were largely reversed.

Asia Session

BoJ's Ueda has a barrage of comments on policy stating the obvious on Tuesday's Asia session. He said there is no preset idea on timing and pace of future hike and if trend inflation accelerates BoJ will adjust degree of monetary support through interest rate hike. Suzuki says groundwork have been laid to take appropriate FX action in the G7 meeting but these verbal interventions are carrying little weight after being very repetitive. U.S. Treasury Yields are lower in the far end while JGB yields higher. USD/JPY is trading 0.06% lower at 154.75. 

The Wall street Journal reported that US drafting sanctions threaten to cut some Chinese banks off from global financial system, citing their support for Russia from commercial goods that also have military uses. It is not the first time and will not be the last time such sanctions would be used to gain diplomatic leverage to ensure the U.S. sanctions on Russia are fully enforced.. Chinese equities are affected and under performed than their Japanese and Hong Kong peers.  AUD/USD is trading 0.14% higher at 0.6458, while NZD/USD slips 0.06% to 0.5916 and USD/CAD unchanged at 1.3699. Else, EUR/USD and GBP/USD are 0.01% higher.