Europe Summary and Highlights 17 December
GBP fell back through the European morning after much weaker than expected UK November CPI data which showed CPI inflation falling to 3.2% y/y on both a headline and a core basis.
European morning session
GBP fell back through the European morning after much weaker than expected UK November CPI data which showed CPI inflation falling to 3.2% y/y on both a headline and a core basis. EUR/GBP gained 40 pips to 0.8795.
The USD was little changed except against GBP. EUR/USD gained around 15 pips to 1.1725 but the USD was otherwise generally not much changed. EUR/SEK was slightly firmer. The German IFO survey was slightly weaker than expected with the business climate index falling to 87.6 from 88.0, but some weakness may have been expected after the softer PMI released yesterday. The labour cost index was also a little weaker than expected at 3.3% y/y. The firmer EUR may have been related to EUR/GBP flows rather than any EUR specific news, as the data was on the soft side.
Asia session
On Wednesday, it is reported that Trump has ordered total blockade of sanctioned oil tankers entering or leaving Venezuela. It is an escalation after he previously ordering the seizure of oil tanker, the Skipper, along with various new sanctions he imposed on Venezuela's president and related personnel. Oil has jumped more than one percent but the broader risk asset is still calm. USD/JPY is trading 0.27% higher at 155.11. November Export came in strong at 6.1% y/y while import is at 1.3% y/y, both supportive for a BoJ move this Friday.
The USD is trading broadly higher against majors on Wednesday. It follows Tuesday's rebound momentum after taking a beating during last week. Major equity indexes are performing individually yet the overall mood isn't upbeat. AUD/USD is trading 0.27% lower at 0.6615, NZD/USD is trading 0.17% lower while USD/CAD rises 0.17%. Else, EUR/USD is down 0.17% and GBP/USD is down 0.27%.