European Summary and Highlights 20 May

European morning session

EUR/USD lost around 15 pips to 1.0870 in a quiet European morning. AUD/USD also slipped lower, trading down around 15 pips o 0.6690, but there was little change in USD/JPY or GBP/USD. EUR/CHF fell back below 0.988 after initially testing up towards 0.9895. EUR/SEK fell 4 figures to 11.61.

There was no data of note, but there were some comments from BoE deputy governor Ben Broadbent, who echoed the comments from BoE chief economist Pill last week in saying that even if the BoE cut rates, monetary policy would still be restrictive. He also said the decline in inflation pressure was reassuring, but noted that the MPC was wary of cutting rates because of the experience of the last few years. But his comments sounded mildly dovish, though GBP was firmer against te EUR through the morning.

Asia session

Market opened with headline of Iranian helicopter carrying president and Minister of Foreign Affairs crashed and soon both were confirmed dead. Haven asset like Gold received a bid as it may escalate geopolitical uncertainty. However, so far there has been no sign of finger pointing, which kept oil prices in check. USD/JPY is trading 0.04% higher at 155.70 while JGB outperform U.S. Treasury in yields.

The Chinese LPRs are left unchanged with expectations that there will be more stimulus in the coming months. Regional sentiment is positive, so as U.S. three major equity indexes.  Commodities are broadly positive on Monday and supported the AUD/USD to trade 0.22% higher at 0.6707, NZD/USD is down 0.04% at 0.6131 while USD/CAD slipped 0.07%. Else, EUR/USD is up 0.12% and GBP/USD is up 0.06%.