Europe Summary and Highlights 27 May
The European morning saw the USD recover the ground lost on Monday with the JPY seeing the most pronounced decline helped by a positive tone to equities.
The European morning saw the USD recover the ground lost on Monday with the JPY seeing the most pronounced decline helped by a positive tone to equities. This was likely a delayed reaction to the Trump extension of the deadline for the 50% tariff on the EU to July announced at the weekend. The EUR also fell back against GBP, helped by weaker than expected French May provisional CPI data, which showed a 0.6% y/y gain against a market consensus of 0.9%. EUR/USD was down 30 pips on the morning to 1.1350, while USD/JPY extended the rise seen in Asia, gaining 60 pips to 143.90. The USD was stronger across the board, with GBP the best performer among the other majors, with GBP/USD falling just 15 pips to 1.3545. The only other data was the European Commission confidence survey, which was marginally more positive than expected.
Asia session
The Japan April services PPI has come in strong at 3.1% y/y. The increasing inflationary pressure combines with BoJ's "hawkish" rhetoric, has kept market participants hopeful of a move from the BoJ when the fog of trade conflict with the U.S. fades. USD/JPY is trading 0.07% higher, reversing earlier losses to 142.10 as JGB yields are falling faster than their U.S. Treasury Yields counterpart.
The broad risk sentiment is soft on Tuesday. While the Chinese industrial profit looks good and was reinforced by state media, regional equities are still being offered though not as much as their U.S. counterparts. USD has reversed its earlier traction to the south partially and see AUD/USD pressured to 0.6472, down 0.24% for the session, NZD/USD also down 0.34% to 0.5979 while USD/CAD rise 0.06%. Else, EUR/USD is down 0.04% and GBP/USD down 0.1%.