North American Summary and Highlights 23 April
Overview - The USD advanced supported by a firmer S and P manufacturing PMI. Equities were stronger but moved off their highs after comments from Bessent on US-China trade.
North American session
The USD strengthened in North America. After a firm open for equities the USD got a lift from an unexpected rise in the S and P manufacturing PMI, to 50.7 from 50.2, though services were weaker at 51.4 from 54.4. A 7.4% rise in new home sales to 724k followed. Equities came off their highs after Treasury Secretary Bessent said a US-China trade deal could take 2-3 years and that there was no unilateral offer from Trump to cut tariffs on China, but this fuelled USD gains versus the risker currencies.
USD/JPY rallied from below 142 to touch 143.50 as UST yields erased early losses while EUR/USD slipped to 1.1325 from around 1.14. EUR slipped versus the GBP but advanced versus the CHF. USD/CAD reached 1.39 from 1.3825 while AUD/USD slipped to .6370 from .6415.
European morning session
The EUR was generally firmer through the European morning. EUR/USD rose 40 pips to 1.1420, and the EUR also gained ground on the crosses. EUR/JPY gained half a figure to 162.10 and the EUR was up 0.1-0.2% on the European crosses and against the CAD, while AUD kept pace with EUR gains.
PMI data provided the man news. The Eurozone composite PMI fell to 50.1 in April, slightly below consensus due to weakness in services, but manufacturing was marginally higher on the month, despite France and Germany both showing small declines. UK composite PMI was much weaker, dropping to 48.9 from 52.5, again due to weakness in services, although the UK manufacturing index also fell. EUR/USD found some encouragement from the data as it was perhaps less weak than the market feared.