North American Summary and Highlights 30 January
Overview - The EUR saw modest gains after the as expected 25bps ECB easing but generally FX moves were limited.
North American session
There was not much reaction to the as expected 25bps ECB easing, or a 2.3% increase in Q4 US GDP which was a little below the published consensus but above some downgraded forecasts following Wednesday’s weak trade and inventory data. Initial claims were very low at 207k from 223k.
The EUR did however see a spike during Lagarde’s press conference, EUR/USD peaking at 1.0467, though this faded leaving only modest gains around 1.0430. A spike in EUR/GBP to 8390 also corrected. USD/JPY saw slippage from around 154.50 to a low of 153.79 partially reversed, the moves consistent with those in UST yields.
European morning session
EUR/USD slipped lower through the European morning, reacting negatively to the weaker than expected Eurozone Q4 GDP data, which came in at 0.0% q/q against a market consensus of 0.1%. EUR/USD lost around 25 pips through the morning, finishing around 1.0395. Most other currencies were broadly steady against the USD, although the CHF and SEK were dragged lower with the EUR. While the GDP data were weaker, the European Commission survey showed a bounce in January back to November levels after a dip in December.
Elsewhere, UK money data were on the strong side of expectations, with consumer credit and mortgage lending and approvals both above expectations, even though M4 growth was slightly weaker than expected at 0.1% m/m.