European Summary and Highlights 18 Dec

The EUR fell back across the board through the European morning, following weaker than expected Eurozone PMIs.
European morning session
USD/JPY gained around half a figure through the European morning, while the USD was otherwise only marginally stronger. EUR/USD was little changed, but EUR/GBP rose around 25 pips to 0.8620.
The German IFO survey was the only significant data, and came in weaker than the published consensus, with the current assessment and expectations indices both lower. However, the business climate index was broadly in line with the German PMI released last week, so was probably less of a surprise than indicated by the published consensus forecast, EUR/USD only dipped briefly in response.
Asia session
The all important BoJ decision will be released on Tuesday's Asia session, our central forecast will be change in forward guidance for BoJ to signal they will be exiting ultra-loose monetary policy and return interest rate to 0% in Q1 2024. Some market participants maybe speculating a more aggressive approach from the BoJ to hike in the December meeting, yet we do not see the BoJ has such urgency. So far on Monday's Asia session, there has been no headline coming from the BoJ or Japanese official side, letting the pair to go with the flow. USD/JPY is trading 0.03% higher at 142.18 while U.S. Treasury and JGB Yields are all lower.
Kiwi has a rough opening against the USD but soon turned to perform the best against the greenback within majors. Both the consumer confidence and business PMI showed improvement in November and seems to be supporting the Kiwi on Monday. There has been speculations in the previous weeks on potential RBNZ OCR hike from the forecast revision and that is why such tier two data become lively in the recent session for the NZD. NZD/USD is trading 0.42% higher at 0.6234. AUD/USD is up barely 5 pips on soft regional sentiment but softer USD, while USD/CAD is unchanged. EUR/USD is 0.18% higher and GBP/USD is 0.14% higher.