Europe Summary and Highlights 11 July

European morning session

EUR/USD edged 105pips higher to 1.1690 but USD/JPY gained 10 pips to 147 in the European morning. GBP/USD was not much changed with EUR/GBP rising 15 pips to 0.8625 after UK May GDP data came in weaker than expected at -0.1% on the month, against a consensus estimate of +0.1%. The weakness was slightly offset by an upward revision to March from 0.2% to 0.4%, so the 3m/3m gain was actually slightly above consensus at 0.5%, but the underlying trend is nevertheless weakening with the May decline following a 0.3% decline in April. Nevertheless, UK yields edged slightly higher as did US and European yields.

Otherwise there was little news of note. French CPI was revised up slightly to 0.9% y/y in June from 0.8% on an HICP basis, and ECB comments from Schnabel and Panetta were respectively hawkish and dovish so broadly balanced each other out.

Asia session

The Loonie is off to a terrible sart on Friday's Asia session as Trump hit Canada with 35% tariff, excluding USMCA goods. The beginning date is the same with other countries on the 1st of August. USD jumped across board as Trump also suggest 15-20% tariff on countries that did not receive the "letter". USD/CAD jumped to 1.3731 before retracing partial gains to 1.3699 currently, up 0.32% for the session. 

USD gained strongly against major on Trump's tariff. While the 35% tariff on Canada grabs the headline, Trump also signaled plans to double the universal baseline tariff to 20% which should be negatively affecting market sentiment. U.S. Treasury Yields are rising throughout the session. USD/JPY is trading 0.59% higher at 147.07. U.S. major equity indexes have retraced most of the earlier losses but remain in the red, while regional equities are performing strongly on stimulus hopes. AUD/USD is down 0.21% to 0.6575, NZD/USD is also down 0.39% at 0.6011 while EUR/USD is down 0.25% and GBP/USD is down 0.22%.