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Published: 2025-10-08T10:07:24.000Z

Europe Summary and Highlights 8 October

2

USD/JPY continued to rise through the European morning, gaining 55 pips to 152.95, with the USD otherwise not much changed, although GBP, SEK and CAD were all a little stronger, gaining 0.1-0.2%.

European morning session

USD/JPY continued to rise through the European morning, gaining 55 pips to 152.95, with the USD otherwise not much changed, although GBP, SEK and CAD were all a little stronger, gaining 0.1-0.2%.

There was no real news to weaken the JPY through the session, with the momentum continuing from the election of Takaichi at the weekend. There was German industrial production data, which came in much weaker than expected at -4.3% m/m, but the weakness was concentrated in the car sector and ascribed to seasonal shutdowns. Swedish CPI was on the soft side of expectations, but didn’t prevent modest SEK gains. Bond yields were generally lower in Europe, and equities stronger.

Asia session

The RBNZ has cut more than expected by 50bps and see the Kiwi getting slaughtered. A key factor behind Kiwi's slump apart from a double cut, is the forward guidance RBNZ has provided that they may cut further. While they have considered both 25 and 50bps cut, the spare capacity and Q2 contraction for NZ seems to have driven them towards a 50bps cut. NZD/USD is trading 0.98% lower at 0.5742. AUD/USD also 0.29% lower at 0.6526 while USD/CAD rises 0.11%. 

The Japan August labor cash earning came in at 1.5% y/y, slowing from the sub 3% growth in July. While the drag seems to be mostly base effect of one time special payment, it indicates the price/wage dynamics only continue to transit gradually. The one way traffic continues in USD/JPY as the diminishing anticipation of rate hikes cut the legs off JPY. USD/JPY is trading 0.34% higher at 152.40. But with JGB yields regaining traction and U.S. Treasury yields sluggish, the move maybe overdone. Else, the broad equity space is performing individually, EUR/USD is down 0.37% and GBP/USD is down 0.27%.

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