Europe Summary and Highlights 3 March
A choppy session saw initial JPY gains followed by EUR gains and JPY losses.
European morning session
A choppy session saw initial JPY gains followed by EUR gains and JPY losses. USD/JPY initially traded down to 150 from an open around 150.50 but then moved back up to 150.90. EUR/USD traded lower from 1.04 to 1.0390 but then moved up strongly to 1.0445. GBP was the strongest performer on then morning, with EUR/GBP edging lower to 0.8255. The CHF followed a similar trajectory to the JPY, with EUR/CHF initially dropping from 0.9390 to 0.9370 before bouncing to 0.9420 by the end of the morning.
These moves in JPY and CHF crosses reflected similar action in equity indices, which initially dipped lower but finished the session higher. Data was generally on the strong side, with Eurozone CPI data coming in above consensus at 2.4% y/y despite the weaker French CPI data released last week. UK money data was also on the strong side, with lending and M3 data both above expectations. There were also modest upward revisions in manufacturing PMIs in both the Eurozone and the UK.
Asia session
The optimism in the risk space did not last after it was seen opening higher on follow through from Friday and crypto market friendly remark from Trump over the weekend. The opening gap in U.S. major equity indexes has been closed once and tried to search for lower grounds while yields are still higher after partial reversal. USD/JPY is trading 0.12% lower at 150.42 after a session high of 151.02.
The overall risk sentiment is choppy on Monday as the opening optimism has generally faded but market participants seems to be refraining themselves to be too bearish before the all important U.S. tariff decision on Tuesday. China says its studying countermeasures in response to Trump's March 4 tariffs but with little follow up on details. USD is trading broadly lower against major and does not seem to be following the partial risk reversal. AUD/USD is up 0.2% to 0.6221, NZD/USD is up 0.09% while USD/CAD slipped 0.16%. Else, EUR/USD is up 0.41% after opening higher at 1.0402 from 1.0373's Friday close and GBP/USD is up 0.2%.