European Summary and Highlights 23 Feb

European morning session

The USD was net little changed through the European morning, but managed modest gains against the JPY and the commodity currencies, while falling slightly against GBP. EUR/USD saw a dip in the early part of the session, but finished little changed near 1.0825. USD/JPY gained around 15 pips to 150.75, while AUD, CAD and NOK were all softer with oil and gas prices.

Datawise the German IFO survey was the only release of significance, and this came in bang in line with expectations on the business climate index, although the expectations index and he current conditions index were both marginally stronger than expected. Otherwise German HDP was confirmed as falling 0.3% in Q4, and there was little else of note.

Bundesbank President Joachim Nagel said Euro zone inflation remains stubbornly high so the European Central Bank should resist any temptation to cut interest rates early, especially before crucial economic data in the second quarter, and this may have helped some further firming in EUR yields.

Asia session

On Friday's Asia session, a slate of Fed Speakers emphasized a cautious approach in adjusting monetary policy. Goldman Sachs joined the club to revise their Fed rate forecast to a June cut instead of May. The impact towards the FX market is muted right now with U.S. Treasury Yields staying in the green. USD/JPY is trading 0.06% higher at 150.61 as JGB yields slip. 

The U.S. equity space continue to cheer and neglects Fed speakers push towards a later cut. However, regional equity do not echo as stimulus induced hype fades while Nikkei is reaching for new high in thirty years. AUD/USD is benefiting from broadly positive risk sentiment and is trading 0.14% higher at 0.6566, NZD/USD is also 0.07% higher at 0.6198 while USD/CAD is unchanged. Elsewhere, EUR/USD is up 0.02% and GBP/USD is up 0.01%.