Europe Summary and Highlights 6 March
JPY and CHF strength were the main features of the European morning.
European morning session
JPY and CHF strength were the main features of the European morning. USD/JPY fell a big figure to 147.80, while USD/CHF fell 35 pips to 0.8865. EUR/USD, GBP/USD and AUD/USD were all slightly softer as the European equity market strength of the last few days saw a correction.
However, the SEK kept pace with the strength of the JPY, with EUR/SEK falling 9 figures to 10.90 after the stronger than expected flash Swedish February CPI data. This showed a 0.9% m/m 2.9% y/y gain in the targeted CPIF, well above the market consensus and triggering further gains in Swedish yields as the market priced out any expectations of further Riksbank easing.
EUR/GBP continues to edge higher helped by a sharp drop in the UK construction PMI, which showed the fastest downturn since May 2020. The Eurozone construction PMI also fell.
Asia session
The trade war has officially begun but market participants are so far taking it easy as both sides are exchanging softer comment. With Trump's negotiation tactic, it should not be surprising to see abrupt changes to his policy. Risk asset looks calm with the regional equities upbeat. The strength in regional equities seems to be trigger by China released another AI Agent, Manus, which claims it is outperforming OpenAI. AUD/USD is up 0.29% to 0.6354, NZD/USD is up 0.18% and USD/CAD slips 0,07%.
USD/JPY has recaptured 149 figure as tariff headlines crossing the wire are on the soft side. The White House announced a one-month tariff reprieve for auto imports from Mexico and Canada in late NA session, which seems to be the catalyst for a calmer tone in the market. Both the U.S. Treasury and JGB yields are higher in the session, 10yr JGB yields have broke 1.5%. USD/JPY is trading 0.19% higher at 149.13. Else, EUR/USD is up 0.12% and GBP/USD unchanged.