North American Summary and Highlights 10 March
Overview - Growing economic fears sent equities sharply slower. The JPY was the primary beneficiary in Europe but the USD advanced in North America, particularly versus the riskier currencies.
North American session
With no major economic data or news events, plunging equities, with the S and P falling over 3% before a modest late correction, was the story of the session. The commodity currencies saw the biggest response. USD/CAD rose to 1.4440 from 1.4360 while AUD/USD fell to .6280 from .6330. AUD/CAD advanced above .91 early in the session but later reversed.
USD/JPY saw early losses to a low of 146.64 before recovering to 147.30 as UST yields stabilized at the long end after moderate early losses. EUR/USD rose as high at 1.0875 before slipping to 1.0830. EUR advanced versus both GBP and CHF, leaving the USD broadly firmer.
European morning session
JPY strength was the main feature of the European morning, as equities and bond yields fell in Europe while Japanese yields held the gains seen overnight. USD/JPY dropped 70 pips to 146.90, while the USD was otherwise fairly steady, but gaining a little ground against the CAD.
Early on the NOK was the best performer, with EUR/NOK dropping 10 figures to 11.65 after a much stronger than expected February Norwegian CPI print. This showed CPI at 3.6% y/y in February against 2.8% expected, with the core rate also much stronger than expected at 3.4% versus 2.9% consensus. This also looks to have triggered some unwinding of short NOK/SEK positions, with EUR/SEK rising 5 figures to 10.98. NOK/SEK gained more than 1% to 0.9410.
The other main data was German industrial production, which showed a larger than expected 2.0% rise in January, but this was correcting a 1.5% December decline.