North American Summary and Highlights 23 June
Overview - The USD remained generally bid, while equities came under pressure led by tech.
North American session
The USD continued to strengthen. With equities under pressure the JPY was resilient, with USD/JPY remaining close to 161.50, while AUD/USD was particularly weak, falling to .6910. Despite losses in AUD/CAD, USD/CAD pushed above 1.42. EUR/USD fell below 1.14 to 1.1380, while GBP/USD saw lows below 1.32. EUR/GBP was little changed but EUR/CHF slightly weaker. BoE’s Taylor advocated an extended hold in policy. June US S and P PMIs were stronger, manufacturing at 55.7 from 55.1 and services at 51.3 from 50.7.
European session
Downside on the German flash Jun PMIs – composite at 48 (mkt 49.6) – follows some upside (from very weak levels) from France – 47.6 (mkt 46.4) from 44.9. EZ prelim comes in at 49.5 from 48.5 (mkt 49.1), though with the maim message being easing in cost pressures (even before the MoU impact is felt on the survey results). EUR/USD saw small dip on the German prints and generally sitting on the critical next band of support at 1.14 +/-.
Otherwise, dollar/risk still strong on the back of the recent US Fed re-pricing, commodity pullbacks and some hype-launch unwind in SpaceX back towards its initial price playing to some generalised profit-taking in high beta tech widely. The Nikkei ends down over 3% and the KOSPI -10%, with Nasdaq future -2.5%. Copper also off 3% while oil continues to drop back.
As a result, most risk pairs off between ½ and ¾ %, and even the yen starting to feel some support coming through from pressure on the crosses with some nascent pick up in volatility on the session.