Europe Summary and Highlights 18 June
EUR/USD and USD/JPY were both unchanged through the European morning, but there were some gains for GBP and some losses for the SEK after UK CPI and the Riksbank rate cut respectively.
UK May CPI was essentially in line with consensus, but the headline y/y rate was a tad above the median expectation, and with GBP having softened in the past week after the labour market data, it managed a modest recovery, EUR/GBP dropping 10 pips to 0.8545.
The Riksbank cut the policy rate by 25bps as expected, and also signalled the possibility of a further cut this year, turning more dovish since May as the momentum of the economy appears to have stalled on the back of tariffs and geopolitical concerns. They also revised down their 2025 GDP growth forecast to 1.2% from 1.9%. EUR/SEK gained 5 figures to 11.02.
EUR/CHF also gained 20 pips to trade above 0.9410, and EUR/NOK was dragged 3 figures higher by the rise in EUR/SEK, reaching 11.45.
Asia session
The May Japanese trade balance come in less negative than expected. While export still contracts by 1.7% y/y, it fares better than estimate. However, import contracts stronger at 7.7%, continue to points toward soft private consumption on negative real wage. USD/JPY is trading 0.17% lower at 145.
Geopolitical tension persists with the U.S. one remark away from getting involved and Iran vowed to retaliate with "biggest surprise". But so far there is little escalation and see equities performing individually. U.S. major equity indexes and Nikkei are in the green while regional equities in China and Hong Kong are in the red. AUD/USD is trading 0.39% higher at 0.6502, NZD/USD is up 0.3% while USD/CAD slips 0.13%. Else, EUR/USD is up 0.19% and GBP/USD is uo 0.9%.