Europe Summary and Highlights 16 April

European morning session

The European morning saw a general recovery in riskier currencies, with USD/JPY gaining half a figure to 142.80 and USD/CHF gaining 30 pips to 0.8175. AUD/USD also gained 25 pips to 0.6375, while EUR/USD was little changed. The risk recovery reflected similar gains in equities, which reversed the decline seen in the Asian session.

UK CPI data came in on the soft side of consensus, with the headline at 2.6% y/y, although the core was in line with market expectations at 3.4%. GBP was little affected by the data, falling a little early in the session in reaction to the overnight equity weakness, but gaining through the morning to finish higher, with EUR/GBP around 5 pips down on the morning just above 0.8560.

Asia session

Trade concern has returned to market participants attention. We are seeing the major U.S. equity indexes opening lower and Gold jumping to another high. Government bonds are also receiving a generous bid in the start with USD trading broadly lower. USD/JPY is trading 0.49% lower at 142.54.

The global risk sentiment turns sour on Wednesday as trade concern resurface along Chinese tough statement against U.S. tariffs. It is quite predictable for the Chinese government has long known for their "face" and will not be seen softening their fighting stance. Whether it is their true intention or not, market participants are taking cues from the less possibility of an imminent easing of U.S.-China relationship and turn sour on risk asset. AUD/USD is trading 0.04% lower at 0.6342, NZD/USD outperformed to trade 0.3% higher at 0.5917 while USD/CAD 0.17%. Else, EUR/USD is up 0.59% and GBP/USD is up 0.24%.