Europe Summary and Highlights 21 May
EUR and GBP resilient despite weak PMIs
European morning session
Despite weak European PMI data the EUR and GBP were resilient through the European morning, recovering the ground lost on the initial release of the weak French PMI. French composite PMI was the weakest since the pandemic, and Eurozone composite PMI reached the lowest since November 2003, while UK composite PMI matched the lows seen in 2025 and 2023. But while EUR/USD initially dipped 30 pips to trade below 1.16, it recovered to be slightly higher at 1.1630 by the end of the session, while GBP/USD was also up 10 pips at 1.3440 after an initial dip below 1.3420. AUD/USD also recovered most of the ground lost overnight, reaching 0.7140 and USD/JPY edged lower through the morning to 158.95. Equity markets were similarly unconcerned by the weakness in the PMIs, rising modestly through the morning helped by generally lower yields. The NOK was the best performer within Europe, with EUR/NOK dipping to 10.75 while EUR/SEK was slightly firmer.
Asia session
The Australian Labor market softens in April as we see rising unemployment, lower participation and employment change. It misses estimate with both full time and part time employment treading lower. AUD/USD fell by 0.38% to 0.7125. NZD/ISD is trading 0.15% lower while USD/CAD rises 0.13% with oil trading individually.
The Japan April Export has beaten estimate at 14.8% y/y with import also slightly above estimate. The overall trade balance is also a beat. Export growth in U.S. is strong but even stronger with China. USD/JPY is trading 0.05% higher at 158.98. Else, EUR/USD is down 0.03% and GBP/USD is down 0.02%.