Europe Summary and Highlights 14 January
The USD gained some ground against the JPY, CHF and GBP through the European morning, but was otherwise little changed.
European morning session
The USD gained some ground against the JPY, CHF and GBP through the European morning, but was otherwise little changed. The JPY and CHF fell back in response to the better risk sentiment seen overnight and this morning, with equities seeing some modest gains. GBP weakness looks to be a symptom of a general UK malaise, with Chancellor Reeves under some pressure due to the rise in gilt yields and concerns about the need for further fiscal tightening. USD/JPY gained around 30 pips to 157.90 while EUR/GBP rise 20 pips to 0.8415.
Datawise, there was little from Europe but there was another very strong NFIB survey from the US. While this may be seen as USD positive, we would not the same surge was seen after the Trump victory in 2016.
Asia session
While BoJ's Himino's remark on rates have kept hopes high for a rate hike in January, but there is not a hint of being a hawkish one and given BoJ's history on disappointing follow up, market participants are unlikely to place their bets untill the dust have settled. USD/JPY is now trading 0.15% higher at 157.50 despite U.S. Treasury Yields stay depressed while JGB yields jumped.
Regional sentiment improves on Tuesday following the overnight rebound in the U.S. equity market. The broad risk mood seems to be supporting the antipodeans. AUD/USD is trading 0.2% higher at 0.6190, NZD/USD is trading 0.47% higher at 0.5610 while USD/CAD slips 0.02%. Else, EUR/USD is up 0.07% and GBP/USD is up 0.06%.