North American Summary and Highlights 7 November
Overview - 25bps easings from the BoE and FOMC generated only modest market reactions.
North American session
The FOMC eased by 25bps as expected. The initial reaction to the statement was a slightly stronger UISD given adjustments removing references to further progress on inflation, but this was reversed during Powell’s press conference, leaving EUR/USD near 1.08 and USD/JPY near 153, close to pre-decision levels. Other currencies saw similar moved, though AUD/USD ended firmer, near .6675.
European session
The Swedish Riksbank accelerated the pace of easing to 50bps, while the Norges Bank left policy unchanged but the guidance was a little more dovish. The Bank of England eased by 25bps but its post-budget guidance was more hawkish. Ahead of the BoE meeting EUR/GBP had picked up from near .8310 to near .8340 but after the decision slipped back to .8320. EUR/NOK and EUR/SEK were both lower with NOK/SEK higher.
The USD was weaker, EUR/USD moving above 1.08 and USD/JPY falling below 153. US data showed initial claims near consensus at 221k from 218k while Q3 non-farm productivity rise by 2.3% annualized, with a 1.9% rise in unit labor costs.