Europe Summary and Highlights 15 Jul
US-Iran continue to exchange threats
NOK reverses chunk of yesterday's gains as CPI undershoots
European morning session
Norway core CPI down to 2.7% from 3.4%y/y (mkt 3.3%), lifting EUR/NOK by just under ½ % to reverse some of yesterday’s oil driven NOK gains.
Otherwise, a steady morning. US-Iran continue to exchange threats, the latter warning on the Bab el-Mandeb Strait, to keep the backdrop tense. Brent fairly flat on the day, front month sitting off $85~.
Eurozone industrial production weaker than expected in May at -0.2% vs mkt +0.2%m/m, with yr/yr down to -1.2%
US focus turns to the BoC as well as PPI data.
Asia Session
It is reported that U.S. forces hit dozens of Iranian military sites near Strait of Hormuz. As per previous commentary, it looks like a full scale escalation (excluding energy infrastructure) rather than tit-for-tat strikes. Such will see near term risk of Strait traffic increasing significantly. AUD/USD is trading 0.15% higher as USD remain soft after CPI. NZD/USD is trading 0.08% higher while USD/CAD slips 0.08% with oil little changed.
USD/JPY continues to consolidate at recent high. The push and pull between rising geopolitical tension and softer than expected CPI seems to have neutralize each other on Wednesday. JGB yields are performing individually across the curve but mostly improving throughout the session. USD/JPY is trading 0.02% lower at 162.20. Else, EUR/USD is up 0.14% and GBP/USD is up 0.09%.