European Summary and Highlights 19 Apr
A quiet European morning session saw a modest risk recovery, with the riskier currencies all edging higher against the USD, JPY and CHF. EUR/JPY gained around half a figure to 164.70, based on EUR/USD and USD/JPY both rising around 20 pips to 1.0660 and 154.50 respectively.
European morning session
A quiet European morning session saw a modest risk recovery, with the riskier currencies all edging higher against the USD, JPY and CHF. EUR/JPY gained around half a figure to 164.70, based on EUR/USD and USD/JPY both rising around 20 pips to 1.0660 and 154.50 respectively. There were similar gains for the AUD, CAD and GBP, although CAD lagged a little and GBP and AUD slightly outperformed.
UK retail sales data early in the session was slightly weaker than expected, coming in flat on the month, but had no real FX impact with the underlying trend remaining similarly flat in what is quite a volatile series.
Asia session
On Friday's Asia session, it was reported that Israel has retaliated and struck multiple targets in Syria and Iran. It seized market's attention as it may lead to another round of escalation in the already tense geopolitical picture. As the fog of war spreads, risk asset was offered and havens are bid. The session progress with Iran saying "there have been no airstrikes, only shot-down quadcopters" and calms the market. From the Japan front, we see y/y National CPI coming in lower than estimate at 2.7%, ex fresh food 2.6%, ex fresh food and energy at 2.9%, all showing further moderation from February. We expect such to continue throughout of the rest of 2024 with speed bumps in the coming month on wage spike. USD/JPY dropped to 153.58 on geopolitical fear before quickly rebounded to 154.26 to trade 0.25% lower with U.S. Treasury and JGB Yields all lower.
Equities in a sea of red globally on geopolitical fear. While off their low, Nikkei is still down 2.5% and HSI 1.4%. Chinese and U.S. equity indexes are also down by less than a percent. Despite Iran may have downplayed the attack, market participants will unlikely to feel comfortable holding positions over the weekend for fear of a downward spiral. Haven asset are faring better while commodities perform individually. AUD/USD is down by 0.5% at 0.6388 after testing session low at 0.6363, NZD/USD is down 0.35% to 0.5881 while USD/CAD rose 0.07% as the impact is neutralized by higher oil prices. Else, EUR/USD is down 0.05% and GBP/USD down 0.11%.