Europe Summary and Highlights 5 November
The USD made some very modest gains through the European morning, edging less than 0.1% higher against most currencies.
European morning session
The USD made some very modest gains through the European morning, edging less than 0.1% higher against most currencies. GB held its own against the USD, while the CAD saw the most pronounced weakness, with USD/CAD rising 25 pips to 1.4135.
European data was on the strong side of consensus. German manufacturing orders rose 1.1% in September against a consensus of 0.9%, and services PMIs were generally revised higher, with the Eurozone composite PMI consequently revised to 52.5 from 52.2, while the UK composite PMI was revised to 52.2 from 52.1. Even so, there was little noticeable impact form the data. Equities and bonds were also not much changed.
Asia session
On Wednesday, we are witnessing a sea of red in major equity indexes, triggered by renewed concern on valuation. As session progress, partial losses are recovered as risk positive headlines regarding tariff surface. China will keep tariffs (previously 24%) at 10% for a year and cease additional duties on certain import, including agricultural products. AUD/USD reversed course from session low at 0.6458 to trade 0.06% higher at 0.6493, NZD/USD is trading 0.2% higher while USD/CAD rises 0.06%
While BoJ's meeting minutes look supportive for the JPY, the real trigger lies in broad based risk aversion for JPY gains. Major equity indexes continue to sink with the Nikkei down more than 3%. Both U.S. Treasury and JGB yields are all lower across the curve. USD/JPY is trading 0.12% lower at 153.48. Else, EUR/USD is up 0.08% and GBP/USD is up 0.03%.