European Summary and Highlights 13 Dec

GBP fell back through a generally quiet European morning in response to the weaker than expected UK October GDP data.
European morning session
GBP fell back through a generally quiet European morning in response to the weaker than expected UK October GDP data. EUR/GBP traded around 20 pips higher to 0.8610, while GBP/USD lost nearly half a figure, reaching a low of 1.2510. EUR/USD was also marginally lower at 1.0775, while USD/JPY reversed early gains to be unchanged at the end of the morning around 1.4570. EUR/NOK extended yesterday’s gains, reaching 11.87 before dropping back.
The UK October GDP data showed a 0.3% m/m decline, with declines in services, industrial production and construction, against market expectations of a flat m/m number. This triggered a decline of around 5bps in UK 2 year yields and the consequent decline in GBP.
Asia session
The Kiwi has been beaten down on Wednesday Asia session, triggered by Westpac's downward forecast revision of Q4 CPI. Westpac cuts its New Zealand Q4 CPI forecast to 0.3% from 0.6%, which is read by market participants if such is the case, the RBNZ does not necessarily have to keep rates higher for longer. The down move in the Kiwi is accelerated by sour regional sentiment. New Zealand government also removed full employment goal for Reserve Bank of New Zealand as they promised in election but should have limited impact towards current RBNZ's policy path. The NZD/USD is down by 0.54% to 0.6100, AUD/USD is 0.06% lower at 0.6555 while USD/CAD rose 0.03% to 1.3592 as oil remain soft.
U.S. Treasury Yields are lower on Wednesday Asia session, so as JGB yields while equities are performing individually across the globe. The latest Japanese Tankan Report shows that most Japanese corporate expect CPI to be above 2% in the coming 5 years, which is not only above BoJ's target but also above their forecast. It will be an interesting read and it seems to be aligning with the pricing behavior change of Japanese corporations. USD/JPY is trading a tad higher by 7 pips to 145.51, still consolidating from the sharp drop last Thursday. Elsewhere, EUR/USD is 0.03% lower and GBP/USD is 0.04% lower.