European Summary and Highlights 24 May
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In a quiet European morning, EUR/USD gained 20 pips to 1.0830, USD/JPY slipped 10 pips to 157, EUR/CHF gained around 15 pips to test the recent highs, and EUR/NOK fell 4 figures to its lowest since March near 11.50.
European morning session
In a quiet European morning, EUR/USD gained 20 pips to 1.0830, USD/JPY slipped 10 pips to 157, EUR/CHF gained around 15 pips to test the recent highs, and EUR/NOK fell 4 figures to its lowest since March near 11.50. AUD, CAD and GBP moved higher with EUR .
UK April retail sales data was much weaker than expected, falling 2.3% m/m, and initially triggered a quick EUR/GBP gain of around 10 pips, but this was short lived and EUR/GBP finished the session just a few pips higher. While weaker than expected, the data is choppy and often seasonally distorted, so one month’s data is not seen as a clear guide. Otherwise there wasn’t much news of note, with the French business survey showing a small deterioration and German Q1 GDP confirmed at 0.2% q/q.
Asia session
The April Japan y/y CPI continue to moderate with headline falling to 2.5% from 2.7%, ex fresh food to 2.2% from 2.6% and ex fresh food & energy to 2,4% from 2.9%. While it remains above 2%, the further moderation would put a cap on BoJ's tightening magnitude. 10 yr JGB yields gained its foot above one percent while U.S. Treasury yields retrace after the overnight gains. USD/JPY is trading 0.1% at 157.05. Despite the lack of verbal intervention, one can not rule of the possibility of BoJ's intervention if USD/JPY continue to rally from this point.
Regional equities in Japan, Hong Kong and China are all in the red after the U.S. equities slumped in the New York session on higher U.S. Treasury Yields. USD is trading broadly stronger and see AUD/USD slipped 0.1% to 0.6600, NZD/USD also slips 0.03% to 0.6097 while USD/CAD rose 0.05% to 1.3735 as oil treads lower. Else, EUR/USD and GBP/USD are down 0.05%.