North American Summary and Highlights 8 Jan
Overview - The USD saw modest gains, assisted by a sharp fall in the Us trade deficit.
North American session
US data was USD supportive, most notably a sharp fall in the October trade deficit to $29.4bn from $48.1bn, though with most of the surprise coming from a sharp rise in exports of nonmonetary gold and a sharp fall in imports of pharmaceutical preparations the drop does not look sustainable. Initial claims at 208k from 200k remain low while Q3 non-farm productivity at 4.9% was strong as expected. Unit labor costs were weak at -1.9% but a tariff-led surge in non-labor costs left the overall implicit deflator strong at 4.0%.
USD/JPY rose to 157 from 156.70, and EUR/USD fell to 1.1650 from 1.1675. EUR/GBP was softer, slipping to .8675 from .8685. Despite a sharp rise in oil prices, the commodity currencies were little changed.
European morning session
The USD gained around 0.1% against GBP, scandis and the JPY but was otherwise little changed through the European morning.
Swedish preliminary December CPI came in weaker than expected at 2.1% y/y which triggered the drop in the SEK. Otherwise, the only significant data was the German November factory orders which rose a whopping 5.6% m/m. However, the market seems to have seen these as erratic as there was no noticeable EUR reaction. Swiss CPI was flat on the month as expected, while the European Commission December survey was mixed.