Europe Summary and Highlights 1 May
The USD was mixed in the European morning.
European morning session
The USD was mixed in the European morning. EUR/USD and GBP/USD edged higher, but commodity currencies and the JPY moved a little lower. Most of Europe is on holiday for May Day, so conditions were quiet, but equity markets made gains, encouraged by the strong results from Microsoft and Meta overnight. There was a mild risk positive tone, with EUR/CHF edging up along with EUR/JPY, but little data of note. UK mortgage lending surged in March due to the change in Stamp Duty coming in from April.
Asian session
The BoJ has kept rates unchanged at 0.5% as per our forecast. While they continue with their rhetoric of "will continue to raise policy rate if economy, prices move in line with its forecast", they have also revised core CPI forecast lower but core-core higher and highlighted risk associated to tariffs. Moreover, GDP has been halved to 0.5% in 2025 and 0.7% in 2026, from 1.1% and 1%. USD/JPY is trading 0.58% higher at 143.88 as U.S. Treasury outpace JGB in yields.
The US Treasury announces agreement to establish US-Ukraine reconstruction investment fund, which is the mineral deal previously discussed. U.S. three major equity indexes are upbeat . AUD/USD is trading 0.16% lower at 0.6392 as import contracts and suggest the recovery in domestic demand remains choppy, NZD/USD is down 0.15% to 0.6393 while USD/CAD rose 0.03%. Else, EUR/USD is down 0.23% and GBP/USD is down 0.32%.