European Summary and Highlights 17 June

European morning session

After initial dips, both EUR/USD and USD/JPY gained ground through the European morning, so that EUR/JPY finished up as the main mover, rising around 30 pips from opening levels to 168.80, with both EUR/USD and USD/JPY gaining around 10 pips. The EUR generally gained ground across the board, with the EUR and USD both a little higher against GBP, scandis and CHF, with AUD/IUSD and USD/CAD little changed.

The main data of interest was the Q1 Eurozone wage data, which came in above expectations at 5.3% y/y with the labour cost index at 5.1% y/y. The EUR recovery may have been helped to some extent by this data, but also looks to reflect slightly less panicky sentiment around the French election, although the polls continue to project a messy election with the right wing RN the largest party.

Asia session

We have a barrage of Chinese data to begin our week with and they are mixed, tilting towards the downside. The property market remains depressed with prices falling at the fastest pace in almost a decade. The PBoC has kept the 1-year MLF interest rate unchanged at 2.5% and seems to signal LPR to be unchanged later in the month. The Chinese equities market under performed Hong Kong and Japanese counterpart after the data.  AUD/USD is dragged by sentiment and is trading 0.16% lower at 0.6604, NZD/USD also down 0.28% while USD/CAD rose 0.07% as oil slipped thirty cents.

After market participants digested the BoJ's disappointment, JGB yields continue to fall with 10yr below 1% and fast approaching Friday low at 0.9%. The price action in USD/JPY points toward market participants clearly disappointed but concern after BoJ intervention at such level and will be on their toes for long position.  USD/JPY is trading 0.02% lower at 157.35. Else, EUR/USD is unchanged and GBP/USD is down 0.03%.