North American Summary and Highlights 26 September

North American session

USD/JPY saw early losses ahead of the US data, bottoming at 144.11, but bounced after the data came in stronger than expected. Initial claims fell further to 218k from 222k while unchanged durable goods orders were more resilient than expected with a 0.5% rise ex transport. Q2 GDP was unrevised at 3.0% but income data saw historical upward revisions, lifting the savings rate. USD/JPY saw another brief move above 145, before slipping back to 144.65.

Other currencies showed little reaction to the data and later saw gains versus the USD, EUR/USD to 1.1180 and GBP/USD to 1.3415, seeing EUR/GBP softer near .8330. EUR/CHF was little changed near .9450. AUD/USD advanced to .69 but with oil weaker USD/CAD was little changed, and AUD/CAD advanced to near .93.

European morning session

The JPY was marginally lower and the riskier currencies generally slightly higher in the European morning, with equities once again making solid gains after the better Chinese equity performance overnight. EUR/USD was net little changed near 1.1150, but USD/JPY briefly popped above 145 before settling back to 144.90 after opening around 144.80. AUD and GBP both gained modestly against the USD. 

The main news of the morning was the SNB rate decision This produced the expected 25bp cut in the policy rate, with the SNB also indicating that further cuts were likely in coming quarters as their inflation forecasts for 2025 and 2026 were both revised significantly lower to 0.6% and 0.7% respectively. There were nevertheless modest CHF gains against the EUR as there was a minority expectation of a 50bp cut. EUR/CHF finished the morning at 0.9450, down from 0.9480 at the open.

Datawise we saw mild improvements in German and Swedish consumer confidence data, while the Eurozone money data was also slightly stronger than expected, with M3 up 2.9% y/y, the most since January 2023.