Europe Summary and Highlights 7 Jan
The USD made modest gains of around 0.1% across the board in the European morning.
European morning session
The USD made modest gains of around 0.1% across the board in the European morning. The gains were seen at the open, when weaker than expected German retail sales data helped to weigh on the EUR, but USD gains were nevertheless quite even across the board.
German retail sales fell 0.6% in November, weaker than the expected 0.2% gain, but the data is volatile and the underlying trend remains quite flat. German unemployment later in the session was much as expected rising 3k in November. French consumer confidence was also in line with consensus. Eurozone December preliminary CPI came in slightly softer than the published consensus at 2.3%, but this was not unexpected after the weaker than expected French and German numbers published on Tuesday. Otherwise, there were European construction PMIs which were generally mixed but the UK construction PMI remains notably weak.
Asia session
The Australian November headline CPI arrived at 3.4% y/y with Trimmed Mean 3.2% y/y. While it remained above 3%, we do not believe it is a number hot enough for the RBA to consider hiking rates in February. However, it does justify further holding rates at current level for the RBA. AUD/USD is trading 0.16% higher at 0.6749, NZD/USD is trading 0.06% lower at 0.5781 while USD/CAD is unchanged.
USD is trading lower on Wednesday's Asia session. U.S. President Donald Trump said interim authorities in Venezuela would hand over 30–50 million barrels of oil to the United States and has dragged oil price lower. U.S. Treasury yields are performing individually while JGB yields are also lower from Tuesday's close. USD/JPY is trading 0.15% lower at 156.35. Else, EUR/USD and GBP/USD are up 0.04%.