North American Summary and Highlights 21 September
Overview - Oil was softer but the USD was well supported, if remaining below Friday’s highs.
North American session
After an early dip the USD picked up but remained short of Friday’s highs in subdued trading. Oil found a base but remained down on the day. There was no significant data but two Fed non-voters (Musalem and Goolsbee) sounded quite hawkish, warning that the inflation problem was not solely down to supply issues.
USD/JPY advanced to 157.50 and EUR/USD slipped to 1.1470 . EUR/GBP was stable but EUR/CHF fell to .9420 from .9440. After slipping to near 1.40 USD/CAD got close to 1.4040. AUD/USD returned to 0.7120 after rising to 0.7140.
European session
Japan on holiday, and a relatively quiet European morning to follow. USD/JPY up modesty in the 157s, after easing off the 158~ bounce highs on Friday’s wide bar amid suggested MoF rate-checking post BoJ disappointment. Markets treading carefully generally, given historical MoF action on holiday - though at present actual action would not seem like a logical move.
IMM data provided some framing to last week’s action too, with data showing the market had jumped yen long (largest since Jun25) prior to the Fed and BoJ outcomes, helping set up the following mini squeeze/correction.
Main interest is oil and geopolitics. Brent is off around -$2.2, with UN meetings this week seen offering a possible diplomatic window, and following Axios reports last week suggesting the US will present a plan. Other negative background noise set aside for now ahead of this. Markets firmer (Nasdaq and Dax up over 1%, US10yr -4.5bp) against these hopes and easing oil backdrop.