North American Summary and Highlights 23 Jun

North American session

US data was on the firm side of expectations, the composite S and P down only marginally to 52.8 in June from 53.0, and May existing home sales up 0.8% to 4.03m, but this was overshadowed by dovish comments from the previously hawkish Fed’s Bowman, who saw tariffs having a small impact on inflation and suggested the Fed could ease as soon as July. This sent the USD lower, EUR/USD rising to 1.1575 from 1.1470 and USD/JPY testing 146 after briefly touching above 148.  

While the USD was weaker across the board, a dip in USD/CAD to 1.3725 from near 1.38 was temporarily corrected as oil fell sharply after an Iranian attack on a US base in Qatar was intercepted, the attack on US base also easing fears that Iran would seek to close the Strait of Hormuz.  Fed dove Goolsbee also noted a limited boost to inflation from tariffs to date. 

European morning session 

The USD made general gains through the European morning, rising around 0.3-0.4% against the EUR, JPY and most of the other G10 currencies, but the CHF outperformed with USD/CHF little changed. Although this suggested some risk aversion, equity markets gained through the morning, with S&P futures now back above Friday’s closing levels. 

European PMIs were close to consensus, with the Eurozone slightly below and the UK slightly above, although the UK survey indicated weakening pressure on services prices. The EUR was slightly softer after the data. Otherwise, news was thin on the ground with the market awaiting more Middle East developments.