European Summary and Highlights 18 Jan

European morning session
There was no significant FX action in a quiet European morning session with all the main pairs within 10 pips of opening levels. Yields were marginally lower, following the softer tone to US yields overnight, and equity indices moved slightly higher through the session. 
News was thin on the ground, with no major data. Eurozone current account data for November showed a decline in the seasonally adjusted surplus to EUR24.6bn. 
The Q4 Bank of England credit conditions survey was released, and showed a significant improvement in credit conditions. Lenders reported that the availability of secured and unsecured credit to households increased in the three months to end-November 2023, and that the overall availability of credit to the corporate sector slightly increased in Q4. Availability for small businesses increased, while remaining unchanged for medium and large businesses in Q4. Overall availability was expected to slightly increase in Q1.

Asia session
The Australian Dec labor report has missed estimate badly at -65.1K with expectation of +17.6K and unemployment rate at 3.9%. Participation rate also lowered from 67.2% to 66.8%. The December report more than neutralized November's strength but should not be used to determine a significant weakening in the Australian labors market as one single month is not comprehensive enough. Yet, there is no doubt very unlikely we will see persistent strength in which  as capacity has been long fully utilized. Chinese equities slumped when Chinese Premier Li Qiang signaled Beijing won’t resort to huge stimulus to revive growth amid the worst bout of deflation in decades in the World Economics Forum.The perfect storm brought the AUD/USD to 0.6526 earlier before rebounding to trade 0.1% higher at 0.6658 now, NZD/USD was also choppy and trade close to unchanged at 0.6117, up 0.02% while USD/CAD slipped 0.09% as oil inches higher.
More geopolitical headline crossed the wire with US military conducted another round of strikes on Houthi targets in Yemen and Pakistan Foreign Ministry confirms Pakistan undertook series of military strikes in Iran. This seems to suggest early signs of geopolitical tension spreading and getting neighbor countries to involve. U.S. Treasury Yields are lower, along with major equity indexes seems to suggest a sour risk mood. The lower yield also  lead to some offers in the greenback. 10yr JGBs rose on the session and supports the JPY to see USD/JPY trade 0.13% lower at 147.99. Elsewhere, EUR/USD is up 0.11% and GBP/USD is up 0.04%.