Europe Summary and Highlights 20 October
The USD was generally slightly firmer against the riskier currencies through the European morning, with EUR/USD dropping 15 pips to 1.1660 and AUD/USD down around 10 pips to 0.6495.
European morning session
The USD was generally slightly firmer against the riskier currencies through the European morning, with EUR/USD dropping 15 pips to 1.1660 and AUD/USD down around 10 pips to 0.6495. USD/JPY dipped mid session but finished the morning net little changed near 150.70, and USD/CHF was also net little changed.
There was little news of any significance. Datawise German September PPI was weaker than expected, down 0.1% m/m and 1.7% y/y. The Eurozone current account surplus was lower than expected at EUR11.9bn in August, but none of this had any impact.
Asia session
Over the weekend, the LDP and Japan Innovation Party have reached a broad agreement to form a coalition government. It almost guaranteed the PM candidate they introduce will be elected, if there is a run-off. There hasn't be significant changes in rate pricing despite Takaichi likely be the next PM and we see USD/JPY trading unchanged at 150.59 after a jump to 151.20 in earlier Asia. JGB are also outperforming U.S. Treasury in yields.
The Q3 New Zealand CPI has come in higher as expected at +3% y/y. The stronger CPI was previewed by the RBNZ in the last meeting, which they see only short term volatility. The RBNZ is still looking toward one more rate cut in 2025 and a 3% y/y may not be enough to stop but slow them. NZD/USD is trading 0.23% higher at 0.5736. The broad risk sentiment seems upbeat, leading by regional equities in Hong Kong and Japan. AUD/USD is trading 0.11% higher at 0.6503 while USD/CAD slips 0.07%. Else, EUR/USD is up 0.19% and GBP/USD is up 0.09%.