North American Summary and Highlights 10 September

North American session

In a session with little news price action was consistent with risk off sentiment ahead of Wednesday’s US CPI release, with USD/JPY slipping below 142.50 from near 143 and the commodity currencies losing ground. USD/CAD bounced to 1.36 from 1.3575 though AUD/USD slippage below .6650 was subsequently reversed. EUR/USD was little changed near 1.1025. EUR/GBP was unable to sustain a recovery and EUR/CHF was weaker near .9335.

August’s NFIB index of Small Business Optimism corrected from four straight gains, slipping to 91.2 from 93.7. Equities were mixed but UST yields were lower. 

European morning session

EUR/GBP and EUR/NOK both moved lower in what was otherwise a fairly quiet European morning session. GBP gained after the UK labour market data, even though the data was somewhat mixed, with stronger official employment data in the 3 months to July offset by weaker data from the more up to date HMRC numbers. Average earnings growth was similarly mixed, with the official data showing a slightly larger than expected fall to 4.0% y/y in the 3 months to July, while the HMRC data showed a rise to 6.2% y/y in August. EUR/GBP fell around 20 pips to 0.8425, while front end UK yields were little changed.

EUR/NOK fell quite sharply through the morning, dropping 6 figures or more than 0.5% to 11.92 from opening levels in spite of slightly weaker than expected CPI data, which showed the core rate easing to 3.2% y/y in August. The initial response had been a small rise towards 12, but this was quickly reversed. 

Otherwise, markets were fairly quiet, with EUR/USD not much changed and USD/JPY reversing some early gains.