Europe Summary and Highlights 16 Jul
USD and GBP settle after yesterday's late moves
UK GDP 0.1%m/m as expected, Breeden quite dovish
European morning session
European morning largely consolidating yesterday’s late burst of action in terms of dollar leakage and GBP gains.
UK May GDP 0.1%m/m, largely as expected, if with back revisions seeing a slightly higher rolling 3m/3m rate but similar yr/yr rate.
GBP got a bit overbought intraday in yesterday’s breakout higher and so backfilling somewhat, cable off around ¼ %. EUR/GBP also some 30 ticks off yesterday’s 0.8450~ test low and back above the .8465 retracement level on some intraday unwinding.
BoE’s Breeden quite dovish, says "We have a softish economic outlook; we have slack in the labour market… those two things mean that that shock is less likely to become embedded and lead to inflationary dynamics that we might need to lean against."
Asia Session
U.S. military campaign continues and is hitting multiple targets on a daily basis. CENTCOM said it completed an evening wave of strikes on Iranian military sites including Bandar Abbas, hours after a separate strike on Greater Tunb Island. The goal remain at neutralizing Iran's capability of disrupting the Strait of Hormuz traffic. Clearly risk off and pointing towards sustained conflict, AUD/USD is trading 0.06% lower at 0.7002. NZD/USD is trading unchanged while USD/CAD rises 0.04% on cooling oil.
USD/JPY's range stays compressed as it lack impetus to move either side sustainably. USD is trading stronger against majors but is met with Japan's verbal intervention. Buyers and sellers of the pair are afraid to get wrong footed, in times of potential intervention or strong USD haven bids in case of further escalation in the Middle East. USD/JPY is trading 0.02% lower at 162.14. Else, EUR/USD is up 0.05%and GBP/USD is down 0.04%.