European Summary and Highlights 05 Feb

European morning session

The USD continued to advance through the European morning, with EUR/USD dropping around 30 pips to 1.0750, while USD/JPY rise more modestly, gaining just 10 pips to 148.45. The USD was also stronger against the other riskier currencies, but the EUR lost a little ground on the crosses against GBP and the CAD, but gained around 3 figures against the SEK.

There wasn’t a great deal of news of any note, with final Eurozone composite PMI unchanged from the preliminary, but the UK composite revised up on the back of services strength. Eurozone PPI fell 0.8% as expected in December, while the German trade surplus was larger than expected at EUR22.2bn in December due to very weak imports. The Eurozone Sentix investor confidence index continues its improvement, hitting its best level since April.

Asia session

Over the weekend, US Central Command reported that forces had conducted strikes on four Houthi cruise missiles. Even it does not look like a direct struck to Iran, very likely such tit-for-tat retaliation will further escalate. The December Australian export and import both improves, with import turning to positive territory. At the same time, Chinese Caixin PMI is showing a slower pace of growth than December, 13th month in a row. Regional risk seems to be taking a harder beating than global equities and see AUD/USD dipped to 0.6486 before retracing some gains to trade 0.08% lower for the session at 0.6507, NZD/USD rebounded 0.12% higher at 0.6071 while USD/CAD rose 0.08% despite oil opened higher for USD is trading mostly stronger.

As geopolitical headline crossing the wire, U.S. Treasury Yields jump at the opening with global risk asset perform individually. Powell's interview with 60 minutes were released on Sunday but does not seem to be providing any new information. JGB yields also jumped across the curve. USD initially jumped higher before retracing some of the gains. USD/JPY touched a new yearly high at 148.82 before rotating lower to trade 0.07% higher at 148.42. Elsewhere, EUR/USD is 0.07% lower and GBP/USD is 0.2% lower.