ForexLive European FX news wrap: Dollar steadies itself, mixed German states CPI

<p>Headlines:</p><ul><li><a href="https://www.forexlive.com/news/saxony-august-cpi-68-vs-67-yy-prior-20230830/">Saxony August CPI +6.8% vs +6.7% y/y prior</a></li><li><a href="https://www.forexlive.com/news/bavaria-august-cpi-59-vs-61-yy-prior-20230830/">Bavaria August CPI +5.9% vs +6.1% y/y prior</a></li><li><a href="https://www.forexlive.com/news/north-rhine-westphalia-august-cpi-59-vs-58-yy-prior-20230830/">North Rhine Westphalia August CPI +5.9% vs +5.8% y/y prior</a></li><li><a href="https://www.forexlive.com/news/spain-august-preliminary-cpi-26-vs-26-yy-expected-20230830/">Spain August preliminary CPI +2.6% vs +2.6% y/y expected</a></li><li><a href="https://www.forexlive.com/centralbank/ecbs-centeno-even-if-we-pause-saying-we-are-done-would-be-the-wrong-message-20230830/">ECB's Centeno: Even if we pause, saying we are done would be the wrong message</a></li><li><a href="https://www.forexlive.com/centralbank/ecbs-centeno-growth-indicators-have-been-surprising-to-the-downside-recently-20230830/">ECB's Centeno: Growth indicators have been surprising to the downside recently</a></li><li><a href="https://www.forexlive.com/centralbank/bojs-tamura-timing-of-easy-policy-exit-must-not-be-too-late-but-not-too-early-too-20230830/">BOJ's Tamura: Timing of easy policy exit must not be too late, but not too early too</a></li><li><a href="https://www.forexlive.com/news/eurozone-august-final-consumer-confidence-160-vs-160-prelim-20230830/">Eurozone August final consumer confidence -16.0 vs -16.0 prelim</a></li><li><a href="https://www.forexlive.com/news/germany-july-import-price-index-06-vs-00-mm-expected-20230830/">Germany July import price index -0.6% vs 0.0% m/m expected</a></li><li><a href="https://www.forexlive.com/news/uk-july-mortgage-approvals-4944k-vs-5100k-expected-20230830/">UK July mortgage approvals 49.44k vs 51.00k expected</a></li><li><a href="https://www.forexlive.com/news/switzerland-august-credit-suisse-investor-sentiment-386-vs-326-prior-20230830/">Switzerland August Credit Suisse investor sentiment -38.6 vs -32.6 prior</a></li><li><a href="https://www.forexlive.com/news/switzerland-august-kof-leading-indicator-index-911-vs-915-expected-20230830/">Switzerland August KOF leading indicator index 91.1 vs 91.5 expected</a></li><li><a href="https://www.forexlive.com/news/us-mba-mortgage-applications-we-25-august-23-vs-42-prior-20230830/">US MBA mortgage applications w.e. 25 August +2.3% vs -4.2% prior</a></li><li><a href="https://www.forexlive.com/news/dollar-bears-looking-for-that-goldilocks-scenario-on-the-us-economy-20230830/">Dollar bears looking for that Goldilocks scenario on the US economy</a></li></ul><p>Markets:</p><ul><li>GBP leads, JPY lags on the day</li><li>European equities lower; S&amp;P 500 futures down 0.1%</li><li>US 10-year yields up 3.3 bps to 4.155%</li><li>Gold flat at $1,937.82</li><li>WTI crude up 0.7% to $81.21</li><li>Bitcoin down 0.7% to $27,396</li></ul><p>After the sharp moves yesterday, things are looking calmer for now at least in European trading.</p><p>The dollar steadied itself as bond yields also find a bit of a footing. But all of this is coming before we get to the US ADP employment roulette data later today.</p><p>Among the highlights of the session was CPI data for German states. The early one was for NRW which saw a slight rise in August inflation and that spooked ECB bettors a little. They moved to price in odds of a 25 bps rate hike to ~61% from around ~54% before that.</p><p>But after the other mixed readings, the pricing fell to ~51% and is now holding at around ~57%. As such, the euro is also holding steady across the board with EUR/USD little changed at 1.0885 currently.</p><p>The dollar is seeing gains more notable against the yen and antipodeans. USD/JPY is up 0.4% to 146.40 as slightly higher yields are helping. Meanwhile, AUD/USD is down slightly by 0.2% to 0.6470 but off its earlier lows of 0.6450 at least.</p><p>In the equities space, the mood is more tentative and tepid now as dollar and yields are holding their ground after the fall yesterday.</p><p>It's now over to the ADP number to see if there is reason for the outsized reaction yesterday to take hold again today.</p>

This article was written by Justin Low at www.forexlive.com.