Europe Summary and Highlights 9 July

European morning session

USD/JPY dropped 40 pips and the CHF was also a little firmer, with USD/CHF down 10 pips to 0.7960, and GBP/USD also gaining around 15 pips to 1.36, but other pairs were not much changed in the European morning. European equities were very strong, rising more than 1% without an obvious trigger, despite the indication from Trump that there would be more announcements on tariffs today.

There was no real reaction to the BoE financial stability report, which indicated that banks and households were generally solid, but highlighted the risk of sharp falls in asset prices

Asia session

The RBNZ has kept rates unchanged at 3.25% as widely expected. Their OCR path forecast only sees one more 25bps hike and they have not changed that forecast. They are also seeing CPI to edge closer to upper band of target range for the rest of the year, a reason for their temporary pause. NZD/USD is trading 0.31% lower at 0.5979, AUD/USD is down 0.15% to 0.6517 while USD/CAD rise 0.19%.

Blood was drawn as Nikkei reported that Nissan halts production of three models for Canada at two US plants due to tariffs. The impact of tariffs are starting to bit, especially for the Japanese auto industry, as there has been little progress of a trade agreement before the U.S. and Japan. Unless either side compromise on the critical auto tariffs, there is unlikely to be a quick deal. USD/JPY is trading 0.4% higher at 147.11. Else, EUR/USD and GBP/USD is down 0.18%.