North American Summary and Highlights 1 October
Overview - Focus was on an Iranian missile attack on Israel though FX reaction was eventually modest.
North American session
Ahead of the US data, a statement by the US that Iran was preparing to launch a missile attack against Israel lifted oil and pressured equities. The US data saw surprisingly strong job openings, up 329k to 8.04m in August. September’s ISM manufacturing index was unchanged at 47.2. However reaction to the data was limited with focus on the Middle East. Midday saw Iran launching a missile attack. Damage from the attacks seems to have been limited though Israel stated there would be consequences for Iran.
USD/JPY fell from near 144 to touch 143 but subsequently recovered and remained within that range even after the missile attack, settling near 143.60. EUR/USD ended only slightly weaker near 1.07 after briefly touching below 1.05. GBP/USD fell below 1.33, lifting EUR/GBP to .8335 from .8315. EUR/CHF ended lower near .9365 but off lows below .9340. AUD/USD slipped but ended only slightly below .69, off the lows. With USD/CAD falling below 1.35 as oil picked up AUD/CAD fell to .93.
European morning session
EUR/USD slipped lower through the European morning, losing nearly half a figure from an open near 1.1140. The decline was mirrored in the other risky currencies, with AUD/USD down 20 pips to 0.6910, with EUR/GBP steady at 0.8325. The JPY went the other way, with USD/JPY down 70 pips to 143.70, while EUR/CHF slipped 40 pips to 0.9390. These FX moves reflected a risk negative tone, and yields were generally slightly lower, although equities only fell very modestly.
Newswise, the Eurozone CPI data came in in line with the published median of 1.8% headline, 2.7% core. Eurozone manufacturing PMI was revised marginally higher, but remained at very weak levels. Otherwise there was little of note.