North American Summary and Highlights 14 January
Overview - The USD was mostly but modestly weaker after a softer than expected US PPI.
North American session
December US PPI with a 0.2% increase, with the ex food and energy rate unchanged, was weaker than expected, but a USD dip on the data was quickly erased. The USD did however build losses later on, led by EUR/USD rising marginally above 1.03 from near 1.2050. GBP/USD recovered above 1.22, but earlier EUR/GBP gains were sustained. USD losses versus AUD and CAD were modest while USD/JPY was little changed near 158. Equities and USTs were mixed but the UST curve steepened.
European morning session
The USD gained some ground against the JPY, CHF and GBP through the European morning, but was otherwise little changed. The JPY and CHF fell back in response to the better risk sentiment seen overnight and this morning, with equities seeing some modest gains. GBP weakness looks to be a symptom of a general UK malaise, with Chancellor Reeves under some pressure due to the rise in gilt yields and concerns about the need for further fiscal tightening. USD/JPY gained around 30 pips to 157.90 while EUR/GBP rose 20 pips to 0.8415.
Datawise, there was little from Europe but there was another very strong NFIB survey from the US. While this may be seen as USD positive, we would note the same surge was seen after the Trump victory in 2016.