Europe Summary and Highlights 29 November

European morning session

The USD was slightly firmer against the riskier currencies through the European morning, but not much changed against the JPY and CHF. EUR/USD lost 20 pips to 1.0560, AUD/USD 15 pips to 0.6505, and USD/CAD also gained 20 pips to 1.4005. EUR/NOK gained 4 figures to 11.70 and EUR/GBP edged up 5 pips to 0.8320, but EUR/SEK was unchanged.

There was plenty of European data, starting with German October retail sales, which were weaker than expected, falling 1.5% on the month. But the 3m/3m trend is still rising, and is at its highest since January 2022. Swedish Q3 GDP was revised stronger to 0.3% q/q from -0.1%. The Eurozone CPI data was on the weak side of expectations, with core coming in at 2.7% y/y, although headline was in line with consensus at 2.3%. UK mortgage lending and approvals were both stronger than expected, but M4 growth and consumer credit were both weaker. None of the data seemed to have any significant impact on markets.

Asia session

The jump in November Tokyo CPI to 2.6% y/y seems to have triggered anticipation of BoJ hike in December as we see JPY gains strongly. The correction in USD/JPY was stalled on Thursday but seems to have gathered steam on Friday's Asia time. The move aligns with yield dynamics between U.S. Treasury and JGB yet the speculation of an earlier rate hike than currently priced in will be a key trigger for the next leg lower. USD/JPY is testing the 150 figure by trading down 1% for the session.

Regional sentiment is upbeat so far on Friday's Asia session. Both the Chinese equity indexes and HSI are up more than a percent, while U.S> three major equity indexes are close to unchanged. USD is trading broadly lower with Treasury yields lower across the curve. AUD/USD is up 0.29% at 0.6518, NZD/USD also 0.4% higher at 0.5912 while USD/CAD slipped 0.17% on higher oil. Else, EUR/USD is up 0.17% and GBP/USD is up 0.18%.