North American Summary and Highlights 15 July

North American session

The USD slipped on a softer than expected US June PPI, -0.3% overall and +0.2% ex food and energy with downward revisions to May. July’s Empire State manufacturing survey at 15.6 from 5.7 was stronger, but price indices corrected lower. Fed’s Wash testified to the Senate with no major surprises, while Fed’s Cook stated the Fed could wait a bit for inflation to slow.

USD slippage accelerated in the afternoon with GBP/USD particularly strong, rising above 1.35 from 1.34. EUR/USD rose to 1.1470 from 1.1410 but USD/JPY was unable to sustain a move below 162 from near 162.40.

There was not much reaction to the Bank of Canada’s decision to leave rates unchanged. The BoC was more positive on the Canadian economy but toned down warnings of possible changes in rates in either direction. USD/CAD did fall to 1.4040 from 1.4075, but this was led by the USD. AUD/CAD was firmer as AUD/USD pushed above .70 to touch .7020.

European session

Norway core CPI down to 2.7% from 3.4%y/y (mkt 3.3%), lifting EUR/NOK by just under ½ % to reverse some of yesterday’s oil driven NOK gains.

Otherwise, a steady morning. US-Iran continue to exchange threats, the latter warning on the Bab el-Mandeb Strait, to keep the backdrop tense. Brent fairly flat on the day, front month sitting off $85~.

Eurozone industrial production weaker than expected in May at -0.2% vs mkt +0.2%m/m, with yr/yr down to -1.2%.