North American Summary and Highlights 1 July

North American session

The USD saw only a very brief bounce on weaker ISM manufacturing with UST yields moving higher, led by the long end, in part of the increased likelihood of Trump winning the election. The USD saw modest gains, USD/JPY up around 20 pips to near 161.50 and EUR/USD down 20 pips to near 1.0735. USD/CAD saw a particularly strong bounce, by around 50 pips to 1.3740. 

June’s ISM manufacturing index slipped to 48.5 from 48.7 with prices paid down to 52.1 from 57.0. May construction spending data was also subdued, down by 0.1% on the month. 

European morning session

There was little change in any of the major currencies in a quiet European morning session. EUR/USD hung onto overnight gains after the first round French election results, but reversed an initial extension of gains in the European morning. The scandis were both modestly firmer, and EUR/CHF gained around 20 pips to a high of 0.9695. Yields and equities were both slightly higher in a mildly risk positive market. 

German state CPI data was on the soft side of expectations, with several of the large states showing a 0.3% decline in the y/y inflation rates, while the consensus for the national data due later s for a decline of 0.2% to 2.6% from 2.8%. Final Eurozone manufacturing PMI was revised slightly higher, but UK final manufacturing PMI was weaker than expected, revised down to 50.9 from 51.4. UK money and credit data was also on the soft side, with M4 falling 0.1% in May and consumer credit also lower than expected.