Europe Summary and Highlights 20 January

European morning session

GBP weakened through the European morning, with EUR/GBP gaining 20 pips to 0.8460, once again in conjunction with a rise in UK yields. There was no obvious news trigger, but GBP continues to show some underlying weakness and suffers whenever gilts sell off.

Otherwise, the USD was mixed, gaining a little ground against the JPY and AUD, but edging a touch lower against the EUR. There was little data, with Just German and Swiss PPI, both of which were on the weak side of expectations. The US holiday is likely to keep things quiet, although there is potential for reaction to Trump’s inauguration. 

Asia session

The early spike in USD/JPY is faded by hope on a BoJ hike this week and the latest Trump remark does not seem too out of line from expectation. The USD is broadly lower even on a U.S. holiday after Trump's inauguration. And is supporting the JPY to see USD/JPY down 0.24% to 155.87 after an early spike to 156.57.

Regional equities are outperforming U.S. equities on Monday as market participants are bracing themselves from Trump's executive orders, which are expected to be signed once he is officially in office in a few hours. So far we are not seeing any out of line headlines from Trump but it is inevitable certain policies will be controversial and have a significant impact on the global economy (tariffs). AUD/USD is trading 0.34% higher with solid regional sentiment and soft USD, NZD/USD is outperforming with 0.5% gains at 0.5610 while USD/CAD slipped 0.22%. Else, EUR/USD is up 0.35% and GBP/USD is up 0.3%.