Europe Summary and Highlights 5 Aug
Waiting on Iran news, Houthis provocative
NZD still the day's main mover after unemployment data
Europe
A very flat morning indeed in FX, extending Asia’s wait and see flatlining to see how the Iran talks play out. Brent though hasn’t been able to hold the move below $80, up around $1 ½ on ongoing uncertainty and as Houthis say they launched a missile at a Saudi tanker in the Red Sea, provocative and keeping the environment complicated and tense. Saudis though reportedly looking to deal with through diplomacy.
The only real mover today remains the kiwi, off around ½ % after the unemployment rate rose to 5.6% vs mkt 5.4%, a post Sep15 high. The increase was driven by the participation rate, with employment up 0.5%, above expectations, which adds some context, but it is still knocked the NZD back.
Asia Session
Market participants reactivated their wait and see mode with conflicting headlines. Trump with his usual optimistic approach faced reality check from Iran, saying that Strait of Hormuz agreement with Oman will be delayed so long as U.S. threats continue. AUD/USD is trading 0.08% higher at 0.7052, supported by major equities and precious metals gain. NZD/USD is trading 0.42% lower while USD/CAD rises 0.09%.
Japan June labor cash earnings continue to be strong at 3.4% y/y. BoJ will be happy to see real wage being more positive and the momentum of business price setting/wage behavior gains further traction. USD/JPY is trading 0.02% lower at 157.66 with JGB yields calmer across the curve. Else, EUR/USD is up 0.03% and GBP/USD is up 0.01%.