Europe Summary and Highlights 22 November
The EUR fell sharply through the European morning in response to much weaker than expected PMI data.
European morning session
The EUR fell sharply through the European morning in response to much weaker than expected PMI data. The composite Eurozone PMI fell to 48.1 from 50.0, its lowest since January, led by a sharp fall in the French composite PMI to 44.8 from 48.1. UK PMI also fell sharply, the composite declining to 49.9 from 51.8. EUR/USD fell from an open near 1.05 to a low of 1.0331 in the hour after the release of the French PMI, but bounce to 1.0430 by the end of the session.
GBP was also weak, initially falling back on weaker than expected UK retail sales data, which showed a 0.7% decline in October and y/y growth falling to 2.4% y/y. This triggered initial EUR/GBP gains of around 20 pips to a high of 0.8347, but the PMI data triggered a general EUR decline and EUR/GBP hit a low of 0.8268 before bouncing to finish the session little changed at 0.8325.
The JPY was the best performer through the session, with USD/JPY dropping half a figure to 154.35, AUD and CAD were both little changed against the USD while NOK and SEK gained against the EUR. EUR/CHF hit a low of 0.9204 after opening at 0.9285, but finished at 0.9260.
Asia session
Japan National October headline CPI came in stronger at 2.3% y/y, moderating from 2.5% in September. Ex fresh food and energy rose to 2.3% from 2.1% y/y. It would be favorable for our call of a December BoJ hike. USD/JPY dipped to 153.96 in early Asia after the release. But the dip did not last and see USD/JPY retraced to 154.55 currently.
Regional equities are sour on Friday with the exception of Nikkei. U.S. three major equity indexes are little changed. USD is broadly stronger and see AUD/USD fell by 0.35% to 0.6488, NZD/USD also 0.49% lower at 0.5830 while USD/CAD rose 0.07%. Else, EUR/USD is down 0.08% and GBP/USD down 0.14%.