North American Summary and Highlights 16 Jun
Overview - The USD advanced versus the JPY but was weaker versus the riskier currencies as hopes built for an end to the conflict between Israel and Iran. Equities and UST yields advanced while oil slipped.
North American session
The USD saw some early slippage, EUR/USD rising to a high of 1.1615 and USD/JPY falling to a low of 143.65. However, this was reversed later in the day, and more so for USD/JPY, which advanced to 144.75, supported by gains in equities and UST yields. EUR/USD slipped to 1.1565 but EUR/CHF was firmer near .9410. GBP/USD and AUD/USD were relatively resilient, seeing marginal gains on the session, but could not hold above 1.36 and 0.6550 respectively. USD/CAD was little changed near 1.3570.
Equities were supported by a report that Iran was seeking a deal to end the conflict with Israel. The only US data release was June’s Empire State manufacturing survey, which was mixed, the current month index weak at -16.0 from -9.2 but 6-month expectations bouncing to a positive 21.2 from -2.0.
European morning session
The USD was mixed through the European morning, gaining modestly against the safer havens but losing ground to the riskier currencies. EUR/USD rose 20 pips to 1.1580, while USD/JPY rose 20 pips to 144.20. USD/CHF was not much changed near 0.8115. The EUR and AUD were generally firmer across the board, but GBP, CAD and NOK managed small gains against the USD while slipping a little lower against the EUR, helped by a weaker oil price. The SEK was the best performer on the morning, with EUR/SEK falling 3 figures to 10.95. The general tone was mildly risk friendly, with equities and yields both higher.
Datawise, Swiss PPI fell 0.5% in May against a market consensus of a 0.1% rise. Eurozone labour costs were higher than expected, rising 3.4% y/y in Q1 against a consensus of 3.2%.