Europe Summary and Highlights 22 October
GBP was the biggest mover on the morning, with EUR/GBP rising 30 pips to 0.8710 on the back of a weaker than expected UK September CPI number, which showed the headline inflation rate unchanged at 3.8% and the core dropping to 3.5% from 3.6%. UK 2 year yields dropped 10bps on the news.
European morning session
GBP was the biggest mover on the morning, with EUR/GBP rising 30 pips to 0.8710 on the back of a weaker than expected UK September CPI number, which showed the headline inflation rate unchanged at 3.8% and the core dropping to 3.5% from 3.6%. UK 2 year yields dropped 10bps on the news.
Otherwise the USD was generally slightly firmer against the riskier currencies, while USD/JPY was little changed. EUR/USD was down around 15 pips to 1.1590, and AUD/SD lost 10 pips to 0.6495.
Asia session
The September Japan trade balance has missed estimate on stronger import. Widely expected a surplus, we are seeing a deficit of 234.6b JPY as import grows stronger by 3.3%. Export towards the U.S. continue to contract on tariff impact while Asia demand remain strong. Despite a headline miss, higher import likely means the domestic demand of Japan stays solid and could point towards steady recovery in consumption amid higher prices. USD/JPY is trading 0.07% lower at 151.82. The pair retraces partial early losses on finance minister Katayama's remark cannot say that Japan has exited deflation fully.
The broad sentiment seems to be a bit sour with regional equities still in the red after clawing back some gains. The major movement in the Asia session lies in metals again with Gold having a volatile 100+ dollar up and down session. AUD/USD is trading 0.15% higher at 0.6497, NZD/USD is trading 0.09% higher at 0.5746 while USD/CAD slips 0.09%. Else, EUR/USD is up 0.05% and GBP/USD down 0.7%.