Europe Summary and Highlights 9 Jan
The USD extended overnight gains against the JPY, with USD/JPY up 20 pips to 157.65, and AUD/USD also slipped another 10 pips to 0.6680, but European currencies were broadly stable against the USD.
European morning session
The USD extended overnight gains against the JPY, with USD/JPY up 20 pips to 157.65, and AUD/USD also slipped another 10 pips to 0.6680, but European currencies were broadly stable against the USD. The NOK made some early gains after stronger than expected December Norwegian CPI, which showed core inflation at a higher than expected 3.1%. EUR/NOK dropped 5 figures on the news to a low of 11.71, but fully reversed the decline by the end of the morning. EUR/SEK actually did move a couple of figures lower, helped by a stronger than expected 0.9% rise in GDP in November, so that NOK/SEK finished the morning down 15 pips at 0.9135 after initially making gains to 0.9175.
As well as Norwegian CPI, we had German manufacturing output which came in stronger than expected, gaining 0.8% m/m. French consumer spending was slightly weaker than expected in November, but Eurozone retail sales were stronger than expected, up 2.3% y/y.
Asia session
The Japan November 2025 Household Spending came in stronger than estimate at +2.9% y/y. While it is generally positive for Japanese economy, the poor wage data released earlier in the week undermined the potential persistent strength of household spending. China has begun restricting exports of rare earths and rare-earth magnets to Japan, further leveraging their natural resources in the geopolitical playing field. USD/JPY is trading 0.35% higher at 157.38 with both the U.S. Treasury and JGB yields are higher.
The broader risk sentiment is undecided to end the first trading week in Asia. While Trump proposes $200bn mortgage-bond buying plan to cut US home loan rates, it seems to be more a political stunt, along with his previous suggestion of banning institution buying single homes. These look like acts towards the mid term election. U.S. major equity indexes are in the red while regional equities, especially Nikkei, outperforms. AUD/USD is trading 0.07% lower at 0.6695. NZD/USD is trading 0.18% lower while USD/CAD rises 0.03%. Else, EUR/USD and GBP/USD are down 0.07%.