Europe Summary and Highlights 29 May
The USD reversed most of its overnight gains through the European morning.
The USD reversed most of its overnight gains through the European morning. EUR/USD recovered from 1.1250 to 1.1280, while USD/JPY fell back to 145.15 from an open near 146. There were similar losses against most currencies, with the safe havens slightly outperforming.
The USD’s decline reflected some more circumspect views on the significance of the court ruling that the reciprocal tariffs are illegal. The White House is appealing, so higher courts may change the decision, but in any case there are still product specific tariffs and there are also other legal avenues by which tariffs can be imposed on countries with large trade surpluses. Equities generally slipped lower after overnight gains.
Asia session
On early Thursday, we are hearing that a US federal court blocked Trump's "Liberation Day" tariffs from going into effect. While the details are not suggesting no tariffs for Trump, it has limited significantly the area Trump's tariff could land. Market seems to be happy for the news despite Trump is guaranteed to appeal. USD/JPY is trading 0.66% higher at 145.76 with U.S. Treasury Yields outperform JGB yields.
The broad risk sentiment stays upbeat after the earlier tariff headline. U.S. three major equity indexes are up more than a percent with regional equities also in the green, led by the Nikkei. More restriction from the U.S. on high tech chip export does not seem to bother market right now as NVidia shown another beta in earnings. AUD/USD is trading unchanged at 0.6427, NZD/USD is down 0.47% to 0.5939, reversing almost all post RBNZ gains while USD/CAD rose 0.05%. Else, EUR/USD is down 0.37% and GBP/USD is down 0.23%