Highlights May 09, 2023 / 07:44 pm UTC

North American Summary and Highlights 9 May

By Dave Sloan

Overview

In a quiet day the USD made modest gains but ended off its highs. 

North American session

The USD continued to gain ground against the EUR and JPY through the North American session, but made more marginal gains elsewhere in a largely newsless market. EUR/USD slipped around 40 pips to 1.0950 before correcting and USD/JPY gained around 30 pips to 135.20. AUD/CAD and GBP corrected from early losses versus the USD as equities stabilized after early losses. EUR/GBP fell below .87. 

The only data was the NFIB survey. The index of 89.0 from 90.1 is the weakest since December 2012 and suggests banking risks are causing concern. Price pressures appear to be easing but the labor market still looks tight. Comments from the Fed’s Jefferson and Williams were both on the hawkish side, playing down the significance of credit tightening in Jefferson’s case, and saying no easing was likely to be needed this year in William’s case. 

European morning session

The USD gained a little ground against the EUR through a quiet European morning session, but was otherwise little changed. EUR/USD fell from 1.10 to 1.0980, and the EUR consequently slipped lower on the crosses as well. EUR/GBP traded below 0.87 for the first time since December. 

There wasn’t any data of any real note. The UK Halifax house price index showed its lowest y/y growth since 2019, but was still marginally positive. The French current account showed a surplus of EUR1.4bn in March, the first surplus since January 2020, with the trade deficit also its lowest for a year at EUR8.0bn. 

EUR/NOK was slightly firmer. Central bank Governor Ida Wolden Bache told a hearing in parliament on Tuesday that  Norway's floating currency exchange rate allows the country to set policy interest rates at levels that are the most appropriate for the economic outlook, suggesting that intervention to prevent NOK weakness was unlikely.

4Cast Ltd. and all of its affiliates (Continuum Economics) do not conduct “investment research” as defined in the FCA Conduct of Business Sourcebook (COBS) section 12 nor do they provide “advice about securities” as defined in the Regulation of Investment Advisors by the U.S. SEC. Continuum Economics is not regulated by the SEC or by the FCA or by any other regulatory body. This research report has not been prepared in accordance with legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research. Nonetheless, Continuum Economics has an internal policy that prohibits “front-running” and that is designed to minimize the risk of receiving or misusing confidential or potentially material non-public information. The views and conclusions expressed here may be changed without notice. Continuum Economics, its partners and employees make no representation about the completeness or accuracy of the data, calculations, information or opinions contained in this report. This report may not be copied, redistributed or reproduced in part or whole without Continuum Economics’s express permission. Information contained in this report or relied upon in its construction may previously have been disclosed under a consulting agreement with one or more clients. The prices of securities referred to in the report may rise or fall and past performance and forecasts should not be treated as a reliable indicator of future performance or results. This report is not directed to you if Continuum Economics is barred from doing so in your jurisdiction. Nor is it an offer or solicitation to buy or sell securities or to enter into any investment transaction or use any investment service.
Analyst Declaration
I, Dave Sloan, the lead analyst declare that the views expressed herein are mine and are clear, fair and not misleading at the time of publication. They have not been influenced by any relationship, either a personal relationship of mine or a relationship of the firm, to any entity described or referred to herein nor to any client of Continuum Economics nor has any inducement been received in relation to those views. I further declare that in the preparation and publication of this report I have at all times followed all relevant Continuum Economics compliance protocols including those reasonably seeking to prevent the receipt or misuse of material non-public information.