Europe Summary and Highlights 27 November
The USD was weaker across the board through the European morning, losing around 0.5% against the EUR and JPY, and similar amounts against most other European currencies.
European morning session
The USD was weaker across the board through the European morning, losing around 0.5% against the EUR and JPY, and similar amounts against most other European currencies. GBP lagged behind slightly, with EUR/GBP gaining 10 pips to 0.8345, while AUD and CAD gained even more modestly, rising around 0.1%.
Newswise there was little of any note. French and German consumer confidence data were both weaker on the month, but have been on a rising trend so the decline was of limited significance. However, there was a significant move in France/Germany yield spreads, which went out to 86bps at the 10 year tenor, the highest since 2012.
Asia session
The RBNZ cut its cash rate by 50bp to 4.25% in the November meeting, revised the August OCR to indicate more front loading of rater cut in 2025 and sees CPI, core CPI & expectation to be closer to the middle of target range with further moderation momentum. But the Kiwi jumped as there was both a malfunction link for RBNZ's old release of hiking (which may have prompted algos reacting) and the November OCR forecast picture suggests to be slightly higher than the August forecast in 2027. While the later was clarified by Governor Orr as a misunderstanding, NZD/USD is still up 0.56% at 0.5867.
The Australian October monthly CPI continues to stay low at 2.1% y/y, however the RBA has shaken off anticipation of early easing by suggesting government energy subsidy have taken some weight out of the inflationary burden for Australians. The RBA trimmed mean remain high and RBA sees the first cut to be in the middle of 2025. AUD/USD is trading 0.03% lower at 0.6472. USD/JPY continues to tread lower as U.S. Treasury Yields is in the red across the curve while JGB yields in the green. The correction in USD/JPY seems to be gathering momentum, after all there was a fifteen figure rally since September. USD/JPY is trading 0.53% lower at 152.27. Else, EUR/USD is down 0.09%, GBP/USD is unchanged and USD/CAD rose 0.15%.