EUR, JPY, USD flows: USD softer after data

The USD has extended its overnight decline after the US data, although the numbers themselves were generally in line with expectations. The only mild deviation from expectations of significance was the core Q3 PCE deflator dropping to 2.1% annualised from the 2.2% initially reported, and this may account for a decline in yields and firmer equities. The EUR has been the best performer, along with GBP and the AUD, gaining around 0.35%, while USD/JPY is only marginally lower, having been the best performer overnight. USD/CHF is also little changed, with EUR/CHF up 40 pips. The outperformance of the riskier currencies chimes with modest gains in equity futures, although these are still mostly lower from the European open, so there doesn’t looks to be a case for any extended risk rally, although the S&P500 did make a new all time high overnight.