North American Summary and Highlights 31 October
Overview - A weaker GBP on fiscal concerns was the main story of the day. The USD was softer versus EUR and JPY.
North American session
Focus turned to the GBP as rising gilt yields generated by concerns over Wednesday’s budget saw EUR/GBP rising to near .8450 while GBP/USD fell well below 1.29, while EUR/USD was relatively stable around 1.0870. USD/JPY, after picking up to 153 fell back below 152. AUD/USD similarly reversed early losses and USD/CAD was little changed.
US data showed initial claims at 216k, the lowest since May 16, from 228k but a slightly slower than expected 0.8% increase in the Q3 employment cost index. The personal income and spending report was largely old news with Q3 totals already seen, but core PCE prices at 0.3%, or 0.254% before rousing were on the form side of trend, while spending with a 0.5% increase exceeded income at 0.3%.
European morning session
The USD was generally a little softer through the European morning. EUR/USD gained around 10 pips to 1.0865 helped by stronger than expected German retail sales data for September and a confirmation of a higher than consensus rise in Eurozone preliminary CPI in October, with the core rate holding at 2.7% y/y.
There were similar small gains for GBP and the JPY, with the JPY gains coming on the back of what were seen as mildly hawkish comments from Ueda after the BoJ meeting. However, AUD/USD fell around 10 pips to 0.6565, and the CAD and NOK were also weaker, helped by the softer tone to equities. But EUR/CHF continued to make gains, rising to a high of 0.9413 after opening at 0.9390.