European Midday Summary and Highlights 25 Mar

European morning session

A quiet European morning session saw little change in EUR/USD or USD/JPY. GBP made modest gains, with EUR/GBP dropping 10 pips to 0.8570, while EUR/SEK was firmer, rising three figures to 11.45. The AUD and CAD also made some small gains against the USD of around 0.1%.

There was no data of any note, and little other news. The weakness of the SEK may relate to the Riksbank meeting this week, which many expect to see a more dovish turn.

Asia Session

On Monday's Asia session, we have more verbal intervention from Kanda saying he is closely watching FX moves with high sense of urgency. It is an escalation of rhetoric as we see the USD/JPY continue to trade above 150 figure even after BoJ raised interest rate to 0%. It is hard to see a sustainable more north in a medium run when FOMC dotplot still showing 75bps of cut and BoJ beginning to move out of negative interest rate. But the January BoJ minutes released on Monday, albeit outdated, is showing members within BoJ is in no rush to further tighten. U.S. Treasury Yields are higher across the curve while JGB yields opened lower. USD/JPY is trading 0.04% lower at 151.34 after reaching session low of 151.05 on jawbone intervention.

The Aussie is gaining proxy support from the Yuan on Monday. The PBoC has fixed onshore yuan rate strongest in almost a year and the "National Team" is also seen buying, to support the Chinese Yuan after its big loss on Friday. Regional sentiment is positive in China and Hong Kong, U.S. equities little changed and Japan's Nikkei falls.  AUD/USD is trading 0.14% higher at 0.6523, NZD/USD up 0.06% to 0.5996 while USD/CAD is unchanged despite stronger oil. Else, EUR/USD and GBP/USD are 0.07% higher.