Europe Summary and Highlights 9 December
The EUR gained 40pips against the USD and a big figure against the JPY through the European morning, with the gains triggered by a sharp rise in Chinse equities at the open.
European morning session
The EUR gained 40pips against the USD and a big figure against the JPY through the European morning, with the gains triggered by a sharp rise in Chinse equities at the open. The Politburo was quoted as saying on Monday that China will adopt an "appropriately loose" monetary policy next year, the first easing of its stance in some 14 years, alongside a more proactive fiscal policy to spur economic growth. China will step up "unconventional" counter-cyclical adjustments, focusing on expanding domestic demand and boosting consumption, state media Xinhua reported. The remarks came ahead of the annual Central Economic Work Conference in the coming days to set key targets and policy intentions for next year.
Other riskier currencies also made gains. AUD/USD gained around 1% to trade near 0.6450, and the CAD and NOK also rallied, albeit more modestly. GBP/USD gained 60 pips to 1.2780.
There was little European news, with the Sentix investor confidence index the only data, and this showed a decline in December to its lowest for a year.
Asia session
The headline Q3 GDP has been revised higher to 0.3% from 0.2% in the preliminary data. However, private consumption is revised lower to 0.7% from 0.9%, while CAPEX is revised higher to -0.1% from -0.2%. If you look past the detail, it could be supportive for our call of a December hike from the BoJ. Echoed by Japan's main opposition leader Yoshihiko Noda's call for gradual BOJ rate hikes. USD/JPY is trading 0.05% lower at 149.89 as both the U.S. Treasury and JGB yields remain depressed.
U.S. and major equity indexes are little changed while regional equities are down half a percent. The market does not seem to be much bothered the the weekend geopolitical news, including the political change in Syria and potential Israel intervention. AUD/USD is down 0.13% at 0.6381, NZD/USD fell 0.39% to 0.5806 with New Zealand Prime Minister Luxon's remark that he is committed to further efforts to lower inflation and interest rates. Else, EUR/USD is down 0.3%, GBP/USD is down 0.17% and USD/CAD rose 0.12%.