USD weaker despite soft European data
What happened overnight
– Euro area IP fell 2.5%mom in September, weaker than expected
– Portugal’s GDP down 0.8%qoq in Q3
– BOE Inflation Report keeps prospect for more asset purchases alive
– New Zealand’s retail sales unexpectedly fell in 3Q
– Japanese prime minister calls for December 16 elections
The USD and JPY are broadly weaker, echoing a move higher in S&P futures. EURUSD has extended its recovery off Tuesday’s 1.2662 lows to trade as high as 1.2757 this morning despite weak euro area IP data. The CE3 currencies are also shaking off that data and outperforming, while sterling has lagged following softer jobs data and a dovish set of BOE minutes. Equity market price action was mixed in Asia, and most European indices are in negative territory, but the S&P future is up 0.5%. Spanish and Italian bond yields are stable after a €5bn Italian bond auction.
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Credit Suisse