European Summary and Highlights 01July
There was little change in any of the major currencies in a quit European morning session.
European morning session
There was little change in any of the major currencies in a quit European morning session. EUR/USD hung onto overnight gains after the first round French election results, but reversed an initial extension of gains in the European morning. The scandis were both modestly firmer, and EUR/CHF gained around 20 pips to a high of 0.9695. Yields and equities were both slightly higher in a mildly risk positive market.
German state CPI data was on the soft side of expectations, with several of the large states showing a 0.3% decline in the y/y inflation rates, while the consensus for the national data due later s for a decline of 0.2% to 2.6% from 2.8%. Final Eurozone manufacturing MI was revised slightly higher, but UK final manufacturing PMI was weaker than expected, revised down to 50.9 from 51.4. UK money and credit data was also on the soft side, with M4 falling 0.1% in May and consumer credit also lower than expected.
Asia session
The French election over the weekend has shown the far right party of Marine Le Pen making historical gains while Macron's centrist suffered losses and left alliance doing well. While these seems to be pointing towards a hung parliament, the Euro seems to be making some gains on lesser uncertainty. EUR/USD gap higher to 1.0743 from 1.0710 Friday's closed and remains higher at 1.0750 currently, GBP/USD also gap higher at 1.2658 from 1.2645 previously closed and is trading 0.08% higher at 1.2655.
After revisiting construction order, Japan has revised GDP lower for at least the last three quarters. The 2024 Q1 annualized GDP has been revised to -2.9% from -1.8%, a significantly deep recession than before. It may weigh on BoJ's decision to further tighten as they are already concerned about consumption yet the key lies in trend inflation forecast. USD/JPY is trading 0.12% higher at 161. 02 as U.S. Treasury yields slips and 10yr JGB yields closing the gap. Else, AUD/USD is down 0.07%, NZD/USD is up 0.09% and USD/CAD down 0.03%, most pair opened higher against the USD with gap once closed in the Asia session.