Europe Summary and Highlights 23 Jun
USD/risk firmer on dollar trend, position adjustment and equity/commodity pullbacks
EZ PMI off lows, price pressures also moderate though (even pre-MoU)
European morning session
Downside on the German flash Jun PMIs – composite at 48 (mkt 49.6) – follows some upside (from very weak levels) from France – 47.6 (mkt 46.4) from 44.9.
EZ prelim comes in at 49.5 from 48.5 (mkt 49.1), though with the maim message being easing in cost pressures (even before the MoU impact is felt on the survey results).
EUR/USD saw small dip on the German prints and generally sitting on the critical next band of support at 1.14 +/-.
Otherwise, dollar/risk still strong on the back of the recent US Fed re-pricing, commodity pullbacks and some hype-launch unwind in SpaceX back towards its initial price playing to some generalised profit-taking in high beta tech widely. The Nikkei ends down over 3% and the KOSPI -10%, with Nasdaq future -2.5%. Copper also off 3% while oil continues to drop back.
As a result, most risk pairs off between ½ and ¾ %, and even the yen starting to feel some support coming through from pressure on the crosses with some nascent pick up in volatility on the session.
Asia Session
After an hour of talk with U.S. Bessent, Japanese minister Katayama remain ambiguous about any concrete action and only suggest Japan-U.S. action pact intact. USD/JPY is trading little changed at 161.64.
Fed speakers set the tone for risk in early Asia session. The emphasis on strong service inflation reignite market participants’ concern on more hawkish tilt from the Fed. Major equity indexes are all in the red, so are precious metals. AUD/USD is trading 0.52% lower at 0.6964. NZD/USD is trading 0.38% lower while USD/CAD is trading 0.12% lower on moderating oil. Else, EUR/USD is down 0.07% and GBP/USD down 0.13%.