Forexlive European FX news wrap: Good day for USD, bad day for JPY

• ECB’s Patsalides: A bigger rate cut is unwarranted now
• ECB’s Holzmann: The ECB should pause further interest rate cuts until at least September
• UK May CBI retailing reported sales -27 vs -8 prior
• Eurozone May final consumer confidence -15.2 vs -15.2 prelim
• Switzerland says hopes for trade talks with the US to yield a result by July
• ICYMI Japan is to consider trimming super-long bond issuance – Reuters
• Fed’s Kashkari: There is a healthy debate on whether to look through tariffs impact
• ECB’s Simkus: The risks that inflation will be below the goal in the future have increased
• German economy expected to contract by 0.3% this year – DIHK
• ECB’s Villeroy: Policy normalisation in the euro area is probably not complete
• France May preliminary CPI +0.7% vs +0.9% y/y expected
• Switzerland April trade balance CHF 6.36 billion vs CHF 6.35 billion prior
• Germany June GfK consumer sentiment -19.9 vs -19.8 expected
• FX option expiries for 27 May 10am New York cut
• More dollar selling to close out the month?

It’s been a pretty empty session in terms of data releases and newsflow. The most important news got released early in the morning which kept the trends going for the rest of the session.

The first one was the Reuters report saying that the Japanese MoF was considering trimming super-long bond issuance in response to the recent surge in yields. That caused long term yields to fall pretty quickly and the JPY to follow them to the downside.

Then we got the French CPI data which missed expectations by a big margin and weighed on the euro. The US Dollar in all of this thrived and erased most of the losses since last Friday.

The focus now switches to the US consumer confidence report in the American session. The data is expected to improve and inflation expectations will also be eyed. Inflation expectations haven’t improved in the UMich report despite the de-escalation in the trade war.

This article was written by Giuseppe Dellamotta at www.forexlive.com.