Europe Summary and Highlights 26 March

European morning session

GBP fell back through the European morning after weaker than expected UK February CPI data. This came in at 2.8^% y/y against the 3.0% expected, down from 3.0% in January. EUR/GBP gained 20 pips to 0.8360, actually hitting a high at 0.8375 mid session.

Otherwise, Swedish consumer confidence data for March came in on the weak side of expectations, and despite better manufacturing confidence this brought down the economic tendency index for the month. But EUR/SEK was little changed. French consumer confidence also softened.

EUR/USD was not much changed, but USD/JPY fell back half a figure to 150.10, helped by a softer equity market tone. AUD and CAD were both stronger on the session.

Asia session

The Australian February monthly CPI came in at 2.4% y/y, staying within the target range. It would be supportive for more easing from the RBA but we are unlikely to see an imminent cut when trimmed mean remain at the upper bound of range. The RBA will likely based their policy around the middle of inflation target range, as per last policy statement. AUD/USD is up 0.09% to 0.6308, NZD/USD is up 0.2% to 0.5744 while USD/CAD is unchanged.

The February Japan Services Producer Price Index stays solid at +3% y/y, continue to point towards inflationary pressure. BoJ Governor Ueda came with the same rhetoric on more rate hikes and potential scenarios of not hiking. It is not the hawkish remark market participants are looking for and see JPY weakens on less prospect of an imminent hike. USD/JPY is trading 0.43% higher at 150.54. Else, EUR/USD is down 0.09% and GBP/USD 0.1%.