Europe Summary and Highlights 29 August

European morning session

The EUR fell back through the European morning following weaker than expected preliminary August German state CPI data as well as weaker than expected preliminary August Spanish CPI data. The German data suggested a fall in the national y/y rate of around 0.5% to 1.8% against the expected 0.2% decline to 2.1%. EUR/USD fell 50 pips to 1.1080, and dragged most European currencies lower with it, although EUR/GBP fell around 15 pips to test 0.84.

There were only modest decline sin EUR/SEK and EUR/NOK, despite the stronger than expected Swedish Q2 GDP data released earlier, which showed a 0.3% q/q decline against a consensus expectation of a 0.8% fall. The better than expected performance was, however, due mostly to net exports, so was seen as less likely to restrict Riksbank easing.

Asia Session

The New Zealand ANZ business outlook index for August has jumped to 50.6 from 27.1, the strongest level in 10 years. The activity outlook is boosted by service and retail, which significantly supported the Kiwi on Thursday's Asia session. NZD/USD is trading 0.77% higher at 0.6293. In the other hand, The Q2 Australia CAPEX has come in at -2.2% from 1% growth in Q1. It will weigh in the softer Australian economy. But given the current inflationary dynamics, it is hard to see a weaker economy to bring RBA's cut early. AUD/USD gains are partially reversed to trade 0.25% higher at 0.6802 after reaching a session high of 0.6083.

The risk space was watching Nvidia's earning in the after hour to determine the tone. While the earnings beats estimate, there is a broad based sold off in the U.S. equity space. U.S. three major equity indexes have barely closed the gap while regional equities are mostly negative. USD/JPY is trading 0.17% higher at 144.84 with JGB yields fell more than U.S. counterpart. Else, EUR/USD is up 0.12% and GBP/USD is up 0.15%.