Europe Summary and Highlights 16 October
There was a risk positive tone to European morning trading.
European morning session
There was a risk positive tone to European morning trading. The USD gained 30 pips against the JPY to 151.30, but lost ground to the AUD and GBP, with AUD/USD rising 15 pips to 0.6505 and GBP/USD up 25 pips to 1.3435. EUR/USD was little changed near 1.1655. EUR/CHF also moved around 10 pips higher to 0.9285.
The main news of the morning was the UK GDP data, which showed the expected 0.1% m/m gain in August, with the 3m/3m growth rate rising slightly to 0.3%. GBP initially slipped marginally lower on the numbers, but gained through the session, with EUR/GBP dropping to 0.8675 from 0.8695.
Asia session
The Australian September unemployment rate has worsened to 4.5% from 4.2%, despite an uptick in participation rate to 67% from 66.8%. Market participants seem to have tilted towards an imminent cut but they would be caught wrong footed as RBA has previewed a higher Q3 CPI, ruling out a November cut. AUD/USD is trading 0.37% lower at 0.6488, NZD/USD outperforms and is trading 0.3% higher at 0.5741 while USD/CAD slips 0.05%.
Even since Komeito announced their departure from LDP coalition, the political front in Japan remains fluid. It is reported that LDP leader Takaichi will hold a meeting with a minor party, Ishin on Wednesday. It looks like she is racing to form a coalition before the opposition party can dispose their difference and unite to challenge her PM candidacy. USD/JPY continues to tread lower at 150.94 with JGB yields stronger than U.S. peers. Else, EUR/USD and GBP/USD is up 0.09%.