Europe Summary and Highlights 22 May
Quiet session, GBP resilient despite weak UK retail sales
European morning session
Europe saw very little FX movement over the morning session. EUR/USD and AUD/USD were both a tad lower, but otherwise the USD was little changed against the majors. The CHF and NOK both made ground against the EUR, with EUR/CHF down 15 pips to 0.9120 and EUR/NOK down 3 figures to 10.72, though without an obvious trigger for either move.
UK data was on the weak side, with retail sales down 1.3% m/m in April, but the core was less weak at -0.4%. The public sector borrowing requirement for April was higher than expected at £24.3bn. However, GBP recovered from a small initial dip after the data and finished slightly higher against the EUR.
The German May IFO survey was slightly stronger than expected, but still weak after the dip in April, and the French INSEE survey was also slightly stronger than expected, likely reflecting the manufacturing solidity seen in the PMIs yesterday, despite the weakness in the service sector. But the EUR was little affected.
Asia session
The Japan National CPI remain shielded by stimulus as we see headline and ex fresh food at 1.4% y/y. Ex fresh food and energy also slipped below 2% at 1.9% y/y. The extension of energy stimulus is till June and figures before that has limited credibility. The underlying inflation would arguably be more important but was previewed by soft household consumption. USD/JPY is trading 0.11% higher at 159.09.
The upbeat positive risk sentiment does not seem to attract Aussie bids as precious metal stay depressed. Market participants are hopeful of a swift end towards the prolong geopolitical tension, which so far is seeing nothing concrete. AUD/USD is trading 0.1% lower at 0.7142. NZD/USD is unchanged while USD/CAD rises 0.1% with both Brent and WTI slightly lower. Else, EUR/USD is down 0.02% and GBP/USD unchanged.