Europe Summary and Highlights 23 September
EUR/USD fell 60 pips through the European morning as the Eurozone PMI data came in much weaker than expected.
European morning session
EUR/USD fell 60 pips through the European morning as the Eurozone PMI data came in much weaker than expected. The composite index fell to 48.9 from 51.0, and the manufacturing index fell to 44.8 from 45.8, both a lot weaker than expected. The weaker data pulled Eurozone yields lower, with 2 year yields down around 10bps, and triggered some modest declines in equities. The weaker risk tone helped USD/JPY to fall around 60 pips to 143.60.
UK PMIs were also weaker than expected, but fell less sharply than the Eurozone PMI, with the composite index down to 52.9 from 53.8, and the manufacturing index down to 51.5 from 52.5, and remained at much higher levels. EUR/GBP made new lows for the year at 0.8355.
Asia session
USD/JPY higher in the early Asia hours on Monday with broad risk mood positive. Japan's vice finance minister for international affairs Atsushi Mimura said "always watching" yen carry trade. He replaced Kanda recently and would be the person pulling the trigger for any intervention. While there seems to be some effort of verbal intervention, it seems unlikely the BoJ will intervene for JPY strength, especially after its significant weakness for the past years. USD/JPY is trading 0.22% higher at 144.17.
The risk mood continues to be mostly upbeat on Monday's Asia session. Regional sentiment seems to be supported by PBoC's cut on 14days repo rate to 1.85% from 1.95%. AUD/USD is trading 0.38% higher at 0.6833. NZD/USD also 0.18% higher at 0.6249 while USD/CAD slips 0.08% on higher oil. Else, EUR/USD is up 0.06% and GBP/USD down 0.02%.