Europe Summary and Highlights 19 Jan
The USD was not much changed through the European morning.
European morning session
The USD was not much changed through the European morning. The AUD and CAD gained marginally, while GBP slipped a tad, but moves were generally very modest. EUR/SEK and EUR/NOK were both higher, by 3 and 2 figures respectively, perhaps reflecting their relative proximity to Greenland. US equity futures edged a little lower, while European futures were little changed after the decline seen in Asia.
Final December Eurozone CPI was the only data, and was revised marginally lower in the headline to 1.9% y/y from 2.0%, but the core was unrevised at 2.3%.
UK PM Starmer called for discussion to avoid a trade war over Greenland, but all but ruled out retaliatory levies against the United States if Trump carried out his threat to impose tariffs on imports from Britain and seven other countries unless the U.S. was allowed to buy Greenland.
Asia session
Trump announced that Denmark, Norway, Sweden, France, Germany, the United Kingdom, the Netherlands and Finland would face a 10% tariff from February 1, rising to 25% from June 1, unless the U.S. is permitted to buy Greenland over the weekend. It came as a huge surprise as a series of allies are being tariffed and it seems Trump is quite determined to acquire Greenland. The geopolitical tension has risen between EU and the U.S. for EU is preparing retaliative tariffs if diplomatic solutions fail. USD/JPY opened 25 pips lower and has yet to close the gap, currently trading 0.17% lower at 157.79.
Risk took a beating with Trump's tariff strategy to take Greenland. Previous metal jumped higher on such geopolitical tension. U.S. major equity indexes all gap lower with little reprieve so far, given the U.S. holiday. Regional equities are also dragged lower with Chinese equities surviving on stronger than expected GDP. AUD/USD also opened lower but soon retrained traction along with gold and see the pair currently trading 0.25% higher at 0.6700. NZD/USD outperforms and is trading 0.42% higher while USD/CAD slips 0.18%. Else, EUR/USD is up 0.35% and GBP/USD is up 0.15%. Most pair have recaptured the opening gap except USD/JPY.