North American Summary and Highlights 7 Jan

North American session

USD data saw December’s ADP employment report slightly weaker than expected with a 41k rise, but still more than fully reversing November’s 29k decline. Later December’s ISM services index at 54.4 from 52.6 was significantly stronger than expected, probably outweighing a weaker than expected November job openings outcome, -303k to 7.146m.

The USD was generally stronger, USD/JPY rebounding to 156.75 after slipping to 156.40. EUR/USD was only marginally softer at 1.1680 after failing to reach 1.17, but EUR/GBP, at .8750 from .8650, and EUR/CHF,  at .9315 from .93, were firmer. USD/CAD advanced to 1.3850 after slipping to 1.38. Modest AUD/USD losses meant AUD/CAD was able to move back above .93 after slipping below.

European morning session

The USD made modest gains of around 0.1% across the board in the European morning. The gains were seen at the open, when weaker than expected German retail sales data helped to weigh on the EUR, but USD gains were nevertheless quite even across the board.

German retail sales fell 0.6% in November, weaker than the expected 0.2% gain, but the data is volatile and the underlying trend remains quite flat. German unemployment later in the session was much as expected rising 3k in November. French consumer confidence was also in line with consensus. Eurozone December preliminary CPI came in slightly softer than the published consensus at 2.3%, but this was not unexpected after the weaker than expected French and German numbers published on Tuesday. Otherwise, there were European construction PMIs which were generally mixed but the UK construction PMI remains notably weak.