Europe Summary and Highlights 2 May

European morning session

The USD fell back through the European morning, with EUR/USD rising 40 pips to 1.1350, and USD/JPY falling 70 pips to 144.50. AUD/USD also gained 20 pips, but GBP and CAD failed to participate, and were little changed against the USD.

The EUR may have benefited from some upward revisions in the April manufacturing PMI data, with the Eurozone PMI up to 49.0 from the provisional 48.7. Eurozone final CPI was also a little above consensus at 2.2%, with core at 2.7% against a 2.5% consensus. There was also a sharp dip in the Swiss manufacturing PMI, which hit its lowest since August, but EUR/CHF was weaker falling sharply towards the end of the session, hitting a low of 0.9312 before bouncing.

Asian session

The U.S. major equities have reverted the Thursday's losses in early Asia session as Chinese remark sparks hope. China says that the US has sought to begin trade talks and is thinking about it, a first positive sign of de-escalation between U.S. and China. Hong Kong equities are also trading higher. AUD/USD is trading 0.46% higher at 0.6413, NZD/USD is also0.44% higher at 0.5932 while USD/CAD slipped 0.24%.

Early optimism has sent USD/JPY higher to 145.92. The March Japan unemployment rate has edged slightly higher to 2.5% from 2.4%, confirming BoJ's take on potential medium term labor shortage but it is unlikely to capture market participants' eye for now.  As session progress, JGB are still performing slightly better than U.S. Treasury Yields and see USD/JPY revert to unchanged at 145.32. Else, EUR/USD is up 0.22% and GBP/USD is up 0.28%.