Europe Summary and Highlights 30 October
The JPY continued to weaken through the European morning, extending overnight losses following the Fed and BoJ decisions, with USD/JPY gaining around half a figure to 153.95.
European morning session
The JPY continued to weaken through the European morning, extending overnight losses following the Fed and BoJ decisions, with USD/JPY gaining around half a figure to 153.95. The USD was generally slightly firmer across the board, gaining 0.1-0.2% against the other G10 currencies.
The EUR was generally slightly firmer on the crosses helped by stronger than expected Eurozone GDP data. This showed a Q3 rise of 0.2% q/q, with France leading the way at 0.5% with export led growth. The European Commission survey was also slightly encouraging, with the business and consumer survey index at its highest since June 2023. German state CPI data mostly showed a modest decline in y/y inflation, broadly consistent with the expected dip in the national CPI to 2.2% (y/y (HICP basis) due later.
Asia session
The BoJ has kept rates unchanged at 0.5% as per forecast. The vote is 7-2 with mostly unchanged economic forecast, 0.1% higher for 2026 core-core CPI. They continue to see inflation will be sustainably reaching 2% target in a medium term and downside risk for economics growth. There has been no mentioning of the potential disruption of new fiscal policy as we do not believe such has been fully formed yet. USD/JPY is trading 0.02% lower after having a figure of volatility on the release.
It is reported that Trump and Xi has met and talked about trade matter. The broader risk market is cheerful on the headline as market participants see it as a further gesture of de-escalation. Trump said he will be lowering tariffs by 10% while China will no longer limit rare-earth export and start purchasing soybeans. With Trump not being as upbeat as he used to be, there seems to be more than a grain of salt. Major U.S. equity indexes are in the green while regional Chinese and Hong Kong equities turned lower. AUD/USD is trading 0.28% higher at 0.6592, NZD/USD is trading 0.32% higher and USD/CAD slides 0.07%. Else, EUR/USD is up 0.22% and GBP/USD is up 0.12%.