North American Summary and Highlights 27 July
Overview - Despite reduced Middle East risks, the USD regained a positive tone in North America.
North American session
The USD was generally firmer, EUR/USD at 1.1370 from 1.14, USD/JPY at 163.75 from 163.60. EUR/CHF saw a bounce to .931 after slipping to .928, EUR/GBP was only marginally firmer. AUD/USD saw only marginal loses to ,.6990 from .70 while USD/CAD rose 1.4120 from 1.41.
June durable goods orders were less strong than expected, up 0.3% overall and 0.6% ex transport, though the ex transport surprise was offset by an upward revision to May. Oil remained weaker but stocks were subdued, and UST yields edged off their lows.
European session
European morning cements and extends the overnight adjustments seen to the weekend US-Iran pause: oil adds to its downward correction (front Brent now down over $8), equities bouncing (S&P future+1%, Dax +1 ½ %), and the dollar mildly trims its haven support (DXY -0.2%). Risk-off tone coming from techs as chip stocks run into corrective selling and rotation, the Nikkei off almost 6% and the Nasdaq off around 1.9%.
EUR/USD’s modest pullback looks slightly below 1.14, though further large options at this figure still provide an anchor point. Main additional FX action seen in the usual Iran/oil sensitive scandis, with USD/NOK +0.8% and NOK/SEK -1.1%. EZ M3 3.3% from 3.2%, in line with market. German IFO 86.6 from 85.6 (mkt 86), led by expectations.