investingLive European FX news wrap: UK CPI in line, JPY extends losses

• US MBA mortgage applications w.e. 14 November -5.2% vs +0.6% prior
• USDJPY extends gains above the 156.00 handle as Japanese officials keep the dovish stance
• Eurozone September final CPI +2.1% vs +2.1% y/y prelim
• Japan Finance Minister: Held meeting on maintaining close Govt, BoJ coordination
• Traders add to BoE rate cut bets after the UK CPI report
• China Foreign Ministry: Takaichi’s remarks on Taiwan have damaged Sino-Japanese relations
• UK October CPI +3.6% vs +3.6% y/y expected
• FX option expiries for 19 November 10am New York cut
• What are the main events for today?

The main highlight of the session was the UK CPI report. The data was in line with forecasts although the services CPI was lower than expected. In terms of market pricing, we haven’t seen big changes of course. The December cut probabilities just rose from 80% to 85%, and the total easing by 2026 from 59 bps to 63 bps after the data. The reaction to the CPI was fairly muted.

The other notable news was the comments from Japanese Finance Minister Katayama who reaffirmed the dovish policy stance and the cooperation between the Government and the BoJ in achieving sustainable wage gains and economic growth. Although there wasn’t anything new in her comments, the JPY extended the losses further with USDJPY breaking above 156.00.

In other markets, US equities are still ranging but off the lows. The US dollar is basically flat on the day. Gold and silver are extending the gains after bouncing from key supports yesterday. Treasury yields continue to consolidate as traders await the US labour market data.

In the American session, the only highlight is the
FOMC meeting minutes. The minutes are the records of the meeting
detailing the discussions, reasoning and decisions made regarding
monetary policy. They are not market-moving because they are released
three weeks after the meeting, so they became stale by the time they are
released.

In fact, we already heard basically
all the Fed members, and Fed Chair Powell in his press conference gave a
pretty thorough analysis of what they talked about in the meeting with
the now infamous “a December cut is not a foregone conclusion – in fact,
far from it”.

This article was written by Giuseppe Dellamotta at investinglive.com.