North American Summary and Highlights 13 August
Overview - The USD dipped on a slightly softer than expected US PPI, but later largely erased its losses.
North American session
The US July PPI came in slightly softer than expected at unchanged overall and 0.2% ex food and energy, but with a 0.4% increase ex food, energy and trade. As with the CPI on Wednesday, the initial response was a slightly weaker USD, but the USD subsequently recovered to end little changed overall, even with UST yields sustaining losses on the data. Equities saw modest gains
USD/JPY held above 159 and returned to near 159.50. EUR/USD traded a tight range, rising to 1.1540 before returning to 1.1530. EUR/GBP remained near 0.8550 while EUR/CHF edged up to 0.9385 from 0.9370. USD/CAD was slightly lower at 1.3935 and AUD/USD slightly firmer near 0.7060.
European session
NOK slightly weaker out of the Norge’s Bank, EUR/NOK up around 30 pips. No change in policy as expected, though somewhat less hawkish in acknowledging the ‘welcome’ downside surprises to inflation while withholding judgement on whether that materially affects the outlook and possible need for any further hike. Oil also slightly off on the day, -$1.5.
UK GDP holds up better than expected in June coming in at 0.3%m/m vs market flat, although leaving Q2 at 0.4%q/q, in line with consensus. With downward revisions, the 3mma is also just 0.05% so still stagnant of late. EUR/GBP broadly flat on morning, under 0.8550.
NZD remains slightly off since the downside surprise in inflation expectations data though trims from overnight lows. 1.21~ on AUD/NZD resistance caps and leans cross back from the day highs.