Europe Summary and Highlights 29 August
The USD was mixed in the European morning session.
European morning session
The USD was mixed in the European morning session. GBP was the biggest mover, with EUR/GBP rising 25 pips on speculation that the government might tax bank reserves at the Bank of England, sending bank shares lower.
The SEK made modest gains against the EUR, with EUR/SEK falling a figure to 11.06 helped by stronger than expected Swedish Q2 GDP data, which was revised up to 0.5% q/q from the 0.1% preliminary data.
Otherwise markets were generally quiet. EUR/USD gained 5 pips and USD/JPY also gained 5 pips, with AUD/USD and USD/CHF slipping around 10 pips. German retail sales early in the session were weak in July, falling 1.5% m/m, but had no market impact. The EUR gained a little ground mid session after stronger than expected German state CPI data, although there is unlikely to be any impact on ECB policy, with French, Italian and Spanish CPI coming in on the soft side of consensus.
Asia session
The August Tokyo headline CPI came in at 2.6% y/y, moderating from 2.9% in July. However, ex fresh food and energy remain elevated at 3.1%, despite ex fresh food also moderates. It continues to point towards stubborn underlying inflation and could further pressure the BoJ to hike. USD/JPY is trading 0.04% higher at 146.99 with both the U.S. Treasury and JGB yields higher. U.S. VP Vance continues to jab Fed's independency while Governor Cook has filed for legal action against Trump.
Regional equities are outperforming U.S. major equity indexes on Friday. There has not been major headlines nor update regarding Trump-Fed fiasco that seized market attention so far in the session. AUD/USD is trading 0.08% higher at 0.6537, NZD/USD is trading 0.09% higher at 0.5889 while USD/CAD rises 0.05%. Else, EUR/USD is down 0.18% and GBP/USD is down 0.12%.