Europe Summary and Highlights 6 September

Europe Session

JPY paused in Europe after further good gains in Asia. Apprehension in global equity markets is driving the latest leg of JPY gains, alongside further narrowing in U.S.-Japan bond yield spreads.  Similar moves are occurring against EUR and GBP, though the CHF is seeing less losses in the past few days as it also benefits in this more risk adverse environment/worries over a U.S. harder landing.

Other currencies were subdued in Europe, though the NOK and SEK made small technical gains.

Going into payrolls the sense is that the number would have to be stronger than expected and prompt a rise in U.S. Treasury yields, otherwise the market will test the downside on USD/JPY at 142.00 and 141.69.  Multi month traders see 135 and potentially 130.