North American Summary and Highlights 12 September
Overview - The ECB eased by 25bps as expected, but EUR/USD moved higher with the USD mostly softer despite a stronger than expected US PPI with a WSJ report keeping the 25bps versus 50bps FOMC debate alive.
North American session
The ECB eased by 25bps as expected and the tone at the press conference was little changed. EUR/USD, having earlier found support near 1.10, moved gradually higher through the session, moving above 1.105 in the afternoon to reach 1.107. GBP/USD marginally outperformed, rising to 1.3120 from around 1.3040.
US August PPI was slightly above consensus at 0.2%, 0.3% ex food and energy but the USD was generally slightly softer, AUD/USD moving above 0.67 and USD/JPY slipping below 142 from 142.50. A WSJ report suggesting it is a close call whether the FOMC moves by 25bps or 50bps in September weighed on the USD in the afternoon. USD/CAD was an exception to the softer USD story, briefly edging above 1.36, despite a strong 22.1% rise in July Canadian building permits, before an afternoon correction. US initial claims rose marginally to 230k from 228k.
European morning session
EUR/USD, GBP/USD, USD/CAD and USD/JPY were all little changed through the European morning, but the AUD slipped back around 15 pips to 0.6675 and EUR/CHF extended overnight gains to trade around 20 pips higher at 0.9415. Scandis were firm, with EUR/SEK and EUR/NOK both losing around 2 figures.
News was thin on the ground, with Swedish CPI the only significant data. This was weaker than expected, with headline dipping to 1.9% y/y and core at 1.2% against consensus estimates of 2.1% and 1.3% respectively. But the weaker data didn’t undermine the SEK which gained ground against the EUR.