Europe Summary and Highlights 15 April

European morning session

EUR/USD fell slightly through the European morning, dipping around 20 pips to 1.1340, but GBP/USD gained 30 pips to 1.3240. EUR/GBP consequently fell 30 pips to 0.8565. This followed somewhat softer than expected UK labour market data, with the March flash payroll data showing the largest monthly decline in employment since the pandemic, while earnings data also weakened on both the HMRC and ONS measures. While this led to lower UK yields, GBP nevertheless gained ground as recent losses against the EUR have been risk rather than yield related, and the lower inflation risks suggested by the data support prospects for UK rate cuts and UK growth.

Otherwise, there was unsurprisingly a sharp fall in the German April ZEW index to its lowest since December 2022, but most currency pairs were fairly steady

Asia session

As JPY continues to gain, we are hearing some more jawboning from the Japanese FM, Kato. While it is very unlikely they will want to weaken JPY, any vigorous movement in a short period of time is always not favorable. U.S. Treasury Yields are lower across curve while JGB yields closing the opening gap. USD/JPY is trading 0.11% higher at 143.16.

The RBA minutes have provided cues of a potential May cut as they forecast trimmed mean CPI to tread below 3% y/y soon. However, it is worth to mention they also highlighted tariff risk and the subsequent inflationary pressure could tilt the RBA towards more cautious easing cycle. The broad risk sentiment is undecided for now but seems to be remain hopeful. AUD/USD is trading 0.48% higher at 0.6357, NZD/USD outperforms to trade 0.78% higher at 0.5923 while USD/CAD slips 0.11%. Else, EUR/USD is up 0.03% and GBP/USD is up 0.17%.