Europe Summary and Highlights 16 July
A generally quiet European morning session saw the USD very little changed, just gaining slightly against the commodity currencies and edging marginally lower against the JPY, with EUR/USD essentially unchanged.
European morning session
A generally quiet European morning session saw the USD very little changed, just gaining slightly against the commodity currencies and edging marginally lower against the JPY, with EUR/USD essentially unchanged. Scandis were both weaker, with both EUR/SEK and EUR/NOK up 4 figures on the morning to 11.32 and 11.94 respectively.
The main news of the morning was the higher than expected UK CPI data for June, with the headline index rising 3.6% y/y against a consensus of 3.4% and the core up 3.7% against a consensus of 3.5%. However, the rise was concentrated in goods, with services inflation falling modestly to 5.2% y/y, and the rise in goods process looks to have bene to some extent due to timing. GBP initially gained on the news, with EUR/GBP dropping 10 pips to 0.8665, but EUR/GBP finished the morning unchanged at 0.8675.
Asia session
The risk sentiment is broadly positive on Wednesday's Asia session. U.S. three major equity indexes have their toes in the green with regional equities performing individually, led by HSI. China and Australia have agreed to review Free Trade Agreement, may signal an improvement in relationship. AUD/USD is trading 0.14% higher at 0.6523, NZD/USD is trading 0.06% higher at 0.5948 while USD/CAD slips 0.03%.
With the upper house election due by the weekend for Japan, Nikkei reports that Prime Minister Ishiba's government risks losing its majority. While it is unlikely to topple the government yet, it will have critical implication towards the Japanese fiscal spending and taxes. Market participants are anticipating more stimulus if the Ishiba government face another losing battle this weekend. USD/JPY is trading 0.18% higher at 149.10. Else, EUR/USD is up 0.13% and GBP/USD is up 0.06%.