Europe Summary and Highlights 16 January
The JPY and CHF made some gains through the European morning, but the USD was otherwise little changed.
European morning session
The JPY and CHF made some gains through the European morning, but the USD was otherwise little changed. GBP was the worst performer, edging slightly lower after weaker than expected November GDP data. This saw a 0.1% gain on the month, following 0.1% declines in September and October, and the underlying trend now appears to be flat, with private sector GDP negative. EUR/GBP gained on the news, but only around 10 pips, and at 0.8430 remains well below yesterday’s highs. USD/JPY dropped around half a figure to 155.70, while EUR/CHF slipped 15 pips to 0.9375. These gains in the safe havens came even though equity markets were generally firm.
Asia session
The Australian labor market stayed strong and see another 55.3k employment gains, with both the unemployment and participation rate ticked up by 0.1%. While most gains are in part time job, a rotation from the November report, it does not take out the strength of such report. However, the tightness in job market has not been aligned with wage growth and seen the rate cut chance in the February meeting rises. AUD/USD reversed from early highs and is trading 0.33% lower at 0.6206, NZD/USD is also down 0.15% at 0.5608 while USD/CAD rose 0.09% on softer oil.
Market chatter continues to hype on a potential January hike from the BoJ as Ueda's remark has once again brewed hope. However, one should be reading this with a pint of salt for such mood swings had happened before in previous BoJ meetings that disappoint. Until we have the "leaks", market participants should remain cautious in believing the rhetoric. USD/JPY has dipped to 155.2 on hopium and is now trading 0.37% lower at 155.84. Else, EUR/USD is up 0.02% and GBP/USD is down 0.18%.