Headlines:
- EUR/USD pares losses on the day after Eurozone inflation data
- Eurozone April preliminary CPI +2.4% vs +2.4% y/y expected
- Eurozone Q1 preliminary GDP +0.3% vs +0.1% q/q expected
- Germany Q1 preliminary GDP +0.2% vs +0.1% q/q expected
- France Q1 preliminary GDP +0.2% vs +0.1% q/q expected
- Spain Q1 preliminary GDP +0.7% vs +0.4% q/q expected
- Italy Q1 preliminary GDP +0.3% vs +0.1% q/q expected
- Japan did not intervene in FX market from 28 March through to 25 April
- Japan top currency diplomat says ready to deal with FX matters around the clock
- ECB's de Cos reaffirms the case for a June rate cut
- Germany March retail sales +1.8% vs +1.3% m/m expected
- Germany April unemployment change 10k vs 7k expected
- Chinese Communist Party set to convene for its third plenary meeting in July
Markets:
- USD leads, AUD lags on the day
- European equities mostly lower; S&P 500 futures down 0.1%
- US 10-year yields up 0.9 bps to 4.622%
- Gold down 1.0% to $2,312.94
- WTI crude up 0.3% to $82.91
- Bitcoin down 4.2% to $61,145
After extreme focus on the Japanese yen to start the week, we're seeing that tone down a fair bit. USD/JPY was largely pedestrian, holding just under the 157 mark throughout the session. The pair was seen around 156.70-90 for the most part, as traders take on a more cautious approach on the day.
That gave the opportunity for euro area data to steal some of the spotlight. The Eurozone economy performed better than expected in Q1, with the German economy skirting a recession to top things off.
Adding to that is further moderation in inflation pressures, with core annual inflation easing to 2.7% in April - down from 2.9% in March. But the reading itself was a slight beat on estimates, which were marked at 2.6%. The euro caught a slight jump on that, with EUR/USD moving up from 1.0710 to 1.0730 initially. But the pair is easing back down now to 1.0717 on the day, near flat levels.
All in all, the data is of much comfort for the ECB as it affords them added flexibility in their next policy steps after June - at least for now.
Elsewhere, the dollar is keeping steadier and pushing back against the slight losses yesterday. AUD/USD in particular is down 0.7% to 0.6523 after poor Australian retail sales data from earlier. The more tepid risk mood going into month-end also isn't helping.
US futures are down slightly while European indices are lagging, set to round off the April month with losses - the first for the year.
In other markets, gold is also under pressure as it is down 1% to $2,312 and Bitcoin is bleeding in a fall to $61,100 levels currently.