North American Summary and Highlights 13 May
Overview - The USD was weaker across the board after US CPI came in on the low side of expectations.
North American session
US CPI came in on the weak side of expectations, up 0.2% both overall and core, 0.22% and 0.24% respectively before rounding. The initial response to the data was modest and UST yields, like equities, ended the day higher, but the USD moved steadily lower through the session.
EUR/USD rose to 1.1185 from 1.110, while GBP/USD reached 1.33 from 1.3220. EUR/GBP saw limited movement but EUR/CHF rallied to .94 from .9350. USD/JPY slipped from 148.20 to 147.50. AUD/USD rallied to .6475 from .64 with AUD.CAD moving above .90, though USD/CAD did slip below 1.3950 after an early move above 1.40.
European morning session
The USD was generally fairly steady through the European morning, with EUR/USD and USD/JPY not much changed. GBP was a little firmer, with EUR/GBP losing around 10 pips to 0.8405. The decline came well after the UK labour market data, which was mixed, with earnings growth a little stronger than expected but employment growth somewhat weaker. USD/CAD was a little firmer, rising 20 pips to 1.3985, while EUR/SEK fell back 5 figures to 10.84.
Other than the UK labour market data there was the German ZEW survey which showed a recovery in the sentiment index in May after the sharp dip in April, but remained well below the March high, while the current conditions index held at low levels. BoE chief economist Pill struck a hawkish note saying interest rates may have to stay higher than the market expects, but this was no surprise as he voted against the latest rate cut.