Europe Summary and Highlights 1 April
The USD was generally slightly weaker through the European morning.
European morning session
The USD was generally slightly weaker through the European morning. EUR/USD pushed up around 10 pips, to trade above 1.08, USD/JPY fell back 20 pips to 149.60 and USD/CAD fell 20 pips to 1.4370. AUD/USD was not much changed. The EUR was weaker on the crosses against the CHF and scandis, but little changed against GBP.
There wasn’t much news of note. Eurozone final manufacturing PMIs were revised slightly lower, while the UK PMI was revised slightly higher, but both remained at low levels. Eurozone CPI came in in line with consensus on the headline at 2.2% y/y but the core was slightly below expectations at 2.4%.
European equities were stronger, recovering the ground lost on Monday, helped by lower yields, with US, UK and European bond yields all down around 7bps along the curve.
Asia session
In the April 1st meeting, the RBA has kept rates unchanged at 4.1% as per our forecast. They cited risk to the upside as a key reason to keep rate unchanged. It is hardly surprising and their forward guidance continue to points toward data dependency. With their data dependency approach and favors inflation sustainably in mid range, it seems to suggest they are looking for the trimmed mean CPI to reach 2.5% before their next cut. AUD/USD is up 0.27% to 0.6263, NZD/USD is 0.04% higher while USD/CAD is down 0.05%.
The market is calmer on Tuesday after a vibrant start to the week. The February Japan Unemployment Rate has come in lower than estimate at 2.4% but historically the data has not been proportionately correlated to wage growth and has little impact towards the JPY. BoJ is reported to begun trimming their purchases of 10–25-year JGBs as planned with full review in June. USD/JPY is trading 0.11% lower at 149.78 with JGB outperform U.S. Treasury yields. Else, EUR/USD is unchanged and GBP/USD is up 0.08%.