European Summary and Highlights 21 May

European morning session

The USD edged a little lower in a quiet European morning. EUR/USD gained around 15 pips to trade above 1.0870, and USD/JPY fell 35 pips to 156.10. AUD/USD recovered losses seen in Asia to trade back at 0.6670. Scandis were slightly firmer, but there was little news of any note.

European data was limited to German PPI, which showed a marginally smaller than expected 0.2% rise in April, and trade and current account data, which showed larger than expected surpluses of EUR24.1bn and EUR35.8bn respectively in March.

Asia session

As USD/JPY challenges pre-CPI high at 156.8, we begin to hear from Suzuki his resumption of verbal intervention. And as usual, verbal intervention has little impact towards FX rate unless it demonstrates a sense of urgency. The USD continues to trade broadly higher with soft U.S. Treasury Yields. USD/JPY is trading 0.15% higher at 156.48 with 10yr JGB yields approaching one percent.

AUD/USD initially spiked higher when the RBA meeting minutes suggest that tightening were still on the table and there were certain hawkish element in the minutes when market participants are anticipating a cut soon. However, the spike quickly reversed when news crossed the wire that Australian telecommunications giant Telstra will be slashing up to 9% of its workforce, further exacerbated by negative regional risk sentiment. AUD/USD is trading 0.18% lower at 0.6655, NZD/USD is down 0.12% to 0.6098 while USD/CAD rose 0.09% with oil following the overnight slip. Else, EUR/USD is unchanged and GBP/USD up 0.01%.