Earlier this morning, we noted that Japan tried to release a whole bunch of ostensibly important econ data on Friday only to be promptly upstaged by Donald Trump when Reuters published an exclusive interview in which the President said there’s “absolutely’ a possibility of a “major, major” conflict with North Korea.
That promptly undercut risk sentiment.
But whatever hint of risk-off Trump’s Reuters saber rattling engendered, it was promptly reversed around six hours later when we got this out of Europe:
- Eurozone April Flash CPI +1.9% Y/y; Est. +1.8% Y/y
- Eurostat reports April flash CPI +1.9% y/y vs March final +1.5% y/y.
- Forecast range 1.6% to 2% from 46 economists
- Eurozone April core CPI ex energy, food, alcohol and tobacco +1.2% y/y; March +0.7% y/y; est. +1% y/y
So obviously that’s a big deal. And not only because the headline print is inline with the ECB’s target and the core number is the highest in almost four years…
…but also because this comes just a day after the ECB said they’re still waiting for a convincing upward trend in underlying prices, even as they noted that risks to the economic outlook have “diminished.”
Needless to say, this was bullish for the euro and for risk more generally. EURUSD jumped to session high of 1.0947, up 0.7%:
That puts the euro on track for its biggest weekly gain since June as good inflation data conspires with a favorable first round outcome in the French elections and a hawkish leak to Reuters to produce the perfect bullish storm.