European Summary and Highlights 24 June

European morning session

The EUR extended gains seen in late Asia with EUR/USD reaching a high of 1.0729 after opening near 1.0700. USD/JPY edged a little lower from 159.70. The EUR was generally firmer, with EUR/CHF gaining around 20 pips to 0.9580, and EUR/GBP gaining 10 pips to 0.8470, although GBP/USD was also dragged higher. 

The main news was the June IFO survey, which came in a little on the soft side of the published consensus, with the business climate index down to 88.6 from 89.3 and both the expectations and current conditions index falling. However, EUR/USD continued to rise, perhaps because the decline was smaller than that seen in the PMI data last week, although the IFO index had lagged behind the PMI in May.

Asia session

As USD/JPY approaches 160 figure, we have Kanda's jawbone intervention with the regular stuff. He is keeping it "mysterious" with no comment on FX level and will not comment if recent forex moves are excessive. It is no doubt 160 will be intervention zone from market participant's mind but the essence of intervention is always its unpredictability. If history is lesson, even when on their toes, speculators will challenge the level gradually until fundamental/momentum shifts or met with intervention. The June BoJ summary of opinion also provide us no surprises, members are split between waiting for more confirmation of achieving inflation target and hike rates swiftly. The consumption drag and fx weakness are on their mind. USD/JPY is trading unchanged at 159.75 despite 10yr JGB yields approaching 1% again. 

Regional sentiment is weak with Japan's Nikkei being the exception. U.S. three major equity indexes are all in the red.  The AUD/USD reached a session low of 0.6626 before slightly rebounding to 0.6637 along with Chinese equity. NZD/USD also slipped by 0.11% to 0.6111 while USD/CAD rose 0.05% to 1.3695 but oil had erased earlier losses. Else, EUR/USD is trading 0.02% after closing the opening gap and GBP/USD is unchanged.