European Summary and Highlights 07 June

The USD was sideways in Europe, with the approach of the U.S. employment report being key.  The bias is that a 50k downside surprise would cause a large USD selloff than a USD bounce on say a 50k upside surprise, as the FX and bond markets are starting to think about more rate cuts again.  The market is discounting a 25bps November cut and close to a further cut in December. 

The JPY did make small gains in Europe to build on the late move Thursday, but traders feel that the U.S. data would have too be weak to produce a break of 155.00 on USD/JPY. 

The EUR moved sideways against the USD, as comments from ECB officials were consistent with Thursday ECB press conference that leaves the market not quite discounting around 40bps of cut this year. 

Gold dropped in Europe on reports that China stopped buying Gold, after an 18 month buying spree.