Europe Summary and Highlights 28 February
The USD was mostly little changed through the European morning, but gained ground against the JPY and CHF.
European morning session
The USD was mostly little changed through the European morning, but gained ground against the JPY and CHF. USD/JPY rose around 35 pips to 150.35, reaching a high of 150.69 mid-session, while USD/CHF gained 30 pips to 0.9028. EUR/USD was marginally firmer around 1.0400. This activity was all very similar to that seen on Thursday, suggesting this may be end of month flow related.
The SEK made gains early in the session, with EUR/SEK dropping from 11.20 to a low of 11.16 after a much stronger than expected revision to Q4 GDP data which showed a rise of 0.8% q/q against an original print of 0.2%. However, by the end of the morning EUR/SEK was back at 11.19.
The other main data was provisional CPI data from France, Germany an Italy, The French data was clearly weaker than expected, with a flat month on an HICP basis against a market expectation of a 0.3% gains. German state and Italian CPI were more in line with consensus.
Asia session
The Tokyo headline CPI has come in lower than expected at 2.9% y/y with ex-fresh food at 2.2% and ex-fresh food & energy at 1.9%. It is still a high read but seems to suggest the spike in inflation has eased and could hinder the pace of more BoJ hike. The sentiment turmoil seems to be in the driving seat on Monday as we see USD/JPY down 0.12% to 149.61 with a session low at 149.09 with JGB yields falling harder than U.S. Treasury Yields, reacting to Japan PM Ishiba's government cuts FY25/26 Budget plan to JPY 115.2tln which includes reduction in new government bond issuance to 28.6tln yen.
In the last trading day of the week, we are seeing the equity space to continue its bleeding. While it seems to be following overnight slump from the U.S. equities, the uncertainty of Trump's tariff policy no doubt is dimming regional outlook. Japanese equities are leading the losses, followed by HSI, U.S. major equity indexes are performing better than Chinese counterpart but remain in the red. AUD/USD is down 0.39% to 0.6212, NZD/USD fell more by 0.53% while USD/CAD edged 0.07% higher. Else, EUR/USD is down 0.12% and GBP/USD is down 0.16%.