Europe Summary and Highlights 4 April

European morning session

The USD managed a general recovery through the European morning, gaining strongly across the board. EUR/USD lost a big figure, slipping to 1.0985, and there were similar declines in GBP and AUD. CAD and JPY held up better, with both USD/JPY and USD/CAD gaining around half a figure. The CHF was the best performer, with USD/CHF little changed, as markets retained a risk averse tone, with equities falling further.

The SEK was the worst performer in the session, with EUR/SEK up 1% to 10.95. The rise was in part due to the general risk aversion and unwinding of positions, but the weaker than expected Swedish CPI data also contributed. The targeted CPIF measure fell to 2.3% y/y against a consensus of 2.6%. Other data was German manufacturing orders, which was weaker than expected at flat on the month in February, but the January data was revised a little higher.

Asia session

USD/JPY took a breather after the slide on Thursday in the early Asia session to a session high of 146.4 but reverted to previous momentum as session progress. Despite both the U.S. Treasury and JGB yields are trading lower, JGB yields are fast approaching 1%. BoJ's Ueda and Uchida have their comment towards the latest development and neither is optimistic, along with "better" than expected February household spending (still contracting by 0.5% y/y). USD/JPY is trading 0.4% lower at 145.44.

Major equity indexes remain in the red as market participants digest the impact of U.S. "universal" tariff. Trump has signaled his willingness to negotiate in the Asia session, naming China and the potential Tik Tok sale for now. USD is trading broadly stronger except against the Euro, Sterling and JPY. AUD/USD is down 1.39% to 0.624, NZD/USD down 1.23% to 0.5723 while USD/CAD is close to unchanged. Else, EUR/USD continues to rise by 0.42$ and GBP/USD is up 0.04%.