European Summary and Highlights 25 Apr

European morning session

The European morning saw general gains for the riskier currencies, with GBP and the AUD the best performers. GBP/USD rose around 0.4% to 1.2515, while AUD/USD gained 0.3% to 0.6525. EUR/USD was also firmer, rising 0.2% to 1.0725. USD/JPY rose modestly to 155.65 but remained below the late Asia high of 155.74. The MNOK slightly outperformed the EUR, while EUR/SEK was steady.

The morning saw strong Swedish data, with improvements in manufacturing and business confidence and a rise in the economic tendency survey index to its highest since August 2022, but this failed to boost the SEK. The French INSEE business survey was a little disappointing, with the index dropping back after two months of gains, while the German consumer confidence index rose slightly more than expected to its best since March 2022.

Asia session

As USD/JPY broke through 155, the speculated intervention from some market participants did not materialize and sees the rally continues. While extreme weakness in the JPY will lure intervention, one must also keep in mind the pace of such weakness. Rather than a spike, the latest USD/JPY rally began in March and entered consolidation for two weeks before slowly grinding higher. Japan chief cabinet secretary Hayashi joined the club with verbal intervention by saying rapid FX moves undesirable and is ready for full response. It is a rhetoric that we could read as intervention could be close but "rapid move" may have different interpretation. Both the U.S. Treasury and JGB Yields are higher across the curve and see USD/JPY marching 0.24% higher at 155.7. 

While U.S. major equity indexes fell on mixed earnings report, regional sentiment is positive in China and Hong Kong, but no Japan. And the AUD/USD is taking cues from that, along with strong iron ore prices. AUD/USD is 0.16% higher at 0.6508, NZD/USD up 0.11% at 0.5942 while USD/CAD slipped 0.09% to 1.3690 with oil up ten cents. Else, EUR/USD is up 0.1% and GBP/USD up 0.04%.