Europe Summary and Highlights 10 September

European morning session

EUR/GBP and EUR/NOK both moved lower in what was otherwise a fairly quiet European morning session. GBP gained after the UK labour market data, even though the data was somewhat mixed, with stronger official employment data in the 3 months to July offset by weaker data from the more up to date HMRC numbers. Average earnings growth was similarly mixed, with the official data showing a slightly larger than expected fall to 4.0% y/y in the 3 months to July, while the HMRC data showed a rise to 6.2% y/y in August. EUR/GBP fell around 20 pips to 0.8425, while front end UK yields were little changed.

EUR/NOK fell quite sharply through the morning, dropping 6 figures or more than 0.5% to 11.92 from opening levels in spite of slightly weaker than expected CPI data, which showed the core rate easing to 3.2% y/y in August. The initial response had been a small rise towards 12, but this was quickly reversed.

Otherwise, markets were fairly quiet, with EUR/USD not much changed and USD/JPY reversing some early gains.

Asia Session

The slate of Australian data is tilted towards the pessimistic side but neither points towards a fast break in inflation, thus the RBA is unlikely to change the current trajectory. Regional equities are performing individually with Chinese equities being the laggard, U.S. three major equity indexes are also in the red. AUD/USD shook off early weakness to trade 0.13% higher at 0.6670, NZD/USD is also 0.12% higher at 0.6154 while USD/CAD rose 0.03%.

The potential Japan PM candidate Kato calls for a bold stimulus package, including a prompt of higher wage. His remarks seems to be out of line with his view towards household income, not to mention the fiscal limit for the Japanese government. USD/JPY is trading close to unchanged with 3 pips high to 143.17 as U.S. Treasury Yields outperform JGB yields. Else, EUR/USD is up 0.05% and GBP/USD is up 0.03%.