Europe Summary and Highlights 11 February

European morning session

A quiet European morning saw EUR/USD edge up 10 pips to 1.0315, while USD/JPY rose around 20 pips to 152.15. USD/CAD was also slightly firmer, but otherwise there was very little net FX movement against the USD.

Early on Norwegian Q4 mainland GDP data came in much weaker than expected at -0.4% q/q, but there was minimal FX market reaction with EUR/NOK just up around one figure to 11.57 on the session.

UK MPC member Catherine Mann spoke mid-morning about her decision to vote for a 50bp rate cut at the last meeting, which had been a surprise as she is an established hawk. She justified the vote by saying that she is an activist by nature and was anticipating weakness in the labour market due to weak demand. GBP was a touch weaker against the EUR through the session but GBP/USD was little changed.

Late in the morning the US January NFIB small business optimism index was weaker than expected, showing a modest decline from the surge higher seen in the last couple of months, but remains well above pre-election levels.

Asia session

The broad risk sentiment is soft on Tuesday's Asia session as the White House says 25% steel tariffs will apply to all countries without exception (back and off with Australia). While the exact date to be imposed will likely be around March, allowing countries to negotiate with Trump in the meantime, there is a potential where these tariffs will bite in. All three U.S. major equity indexes are in the red, so as the Chinese and Hong Kong equities. AUD/USD is down 0.07% to 0.6273, NZD/USD is up 0.06% to 0.5644 while USD/CAD rose 0.13%.

With no break for the tariff man on chatters regarding the steel and aluminium tariff, Trump also left remarks on the Gaza deal and threatens Hamas to release all hostage by Saturday. USD is broadly higher and see USD/JPY up 0.01% to 152.01. U.S. Treasury Yields are lower in the front and higher in the back. Else, EUR/USD is unchanged and GBP/USD is down 0.04%.