Europe Summary and Highlights 28 May
The USD was softer in a quiet European morning session.
The USD was softer in a quiet European morning session. EUR/USD gained 25 pips to 1.1335, and USD/JPY lost 15 pips to 144.15. The riskier currencies broadly kept pace with the EUR while the CHF moved in line with the JPY.
There were several second tier data releases, none of which had market impact. German unemployment data showed a larger than expected 34k rise in May, while French Q1 GDP was unrevised at 0.1% q/q, although the y/y rate was revised down to 0.6% from 0.8%. French consumer spending was weaker than expected at 0.3% in April after a 1.1% decline in March. Swedish retail sales were on the strong side of consensus at 5.3% y/y in April, while German import prices fell a larger than expected 1.7% in April.
Asia session
The RBNZ Cut by 25bps as expected to 3.25%. There are also revision to their forecast with OCR to 3.12% in September 2025 and 2.87% in June 2026, both lowered from previous forecast. However, the forecast for annual CPI in June 2026 is also revised lower to 1.9%. Yet, NZD/USD jumped to a session high of 0.5979 as the board voted 5 to 1 for the cut before retracing partial gains to trade 0.09% higher at 0.5953 currently. Market participants are reading that as more uncertainty for the coming cuts and results could remain fluid on economic and global development. AUD/USD is trading 0.15% lower at 0.6433 while USD/CAD rose 0.13%. The broad equity market is performing individually.
Headline crossed the wire on Wednesday that Japan is offering to buy up to $6.94 billion worth of US semiconductors, according to the Asahi newspaper. This is the kind of headline you would love to see if you are looking towards a U.S.-Japan trade deal, especially after the change of winds in the past two weeks from the Japanese side on total exemption from tariffs. USD/JPY is trading 0.09% higher at 144.45 with U.S. Treasury Yields outperform JGB yields. JGB yields are being suppressed by BoJ governor Ueda's comment on bond market volatility. Else, EUR/USD is down 0.17% and GBP/USD down 0.23%.