Europe Summary and Highlights 2 June
The USD continued to decline through the European morning session.
The USD continued to decline through the European morning session. EUR/USD gained half a figure to 1.1430, while USD/JPY also fell around half a figure to 142.85. The CHF and scandis were slightly the best performers through the morning, gaining around 0.2% against the EUR, while GBP and the AUD moved in line with the JPY and the CAD gained even more modestly.
The CHF received some support from stronger than expected Q1 Swiss GDP data, which rose 0.5% q/q against a consensus of 0.4%. There were upward revisions in the Eurozone and UK manufacturing PMI numbers that may have helped the European currencies. However, UK money and credit data was on the weaker side, with no growth in M4 and weaker than expected mortgage approvals and lending.
Asia session
Nikkei reported that Bank of Japan has boosted its provisions for JGB losses, suggesting they are likely preparing for higher yields from more tightening in the year. JGB yields are up a notch on Monday so far. USD/JPY is trading 0.34% lower as USD slides broadly and JGB yields outpace U.S. Treasury Yields. Broad equity indexes are all in the red with HSI leading the losses.
Over the weekend, Ukraine launched a large-scale drone offensive against Russian targets. Those targets are deep in Russia and saw significant damage to multiple Russian aircrafts. It brings more geopolitical uncertainty as Ukraine and Russia are still in a negotiation for a peace deal, expected to be meeting in Tukey soon. AUD/USD benefited from broadly soft USD to trade 0.33% higher at 0.6453. OPEC+ decided to continue hiking output by 411k barrels three months in a row but oil price are supported in the open from geopolitical tension. NZD/USD is 0.55% higher at 0.5997 while USD/CAD slips 0.14%. Else, EUR/USD is up 0.18% and GBP/USD up 0.29%.