North American Summary and Highlights 7 Dec
Overview
JPY continued its sharp gains seen following Ueda's comments.
North American session
The JPY continued to gain ground through the North American session, with USD/JPY at one point losing 3.5 figures to trade at 141.60 on a spike lower. It bounced from here, but remained well down on the day near 143.50 – a level broadly consistent with the nominal yield spread correlation that has held for most of the last few years. The USD also lost ground elsewhere, with EUR/USD rising above 1.08 and AUD/USD rallying above 0.66, if in neither case by much. USD/CAD was not much changed, with BoC Deputy Governor Gravelle stressing more progress was needed in reducing inflation. The JPY remained the main driving force.
US data was if anything on the strong side. Initial claims at 220k were spot on expectations and up only marginally from last week's 219k. Continued claims at 1861k were lower than expected and down from last week's 1925k, but still up from 1841k two weeks ago. October consumer credit however saw a weaker than expected rise of $5.1bn.
European morning session
USD/JPY fell sharply through the European morning, extending the losses in Asia after Ueda's comments. It lost around 1.5 big figures to 145. The USD also lost a little ground elsewhere, with EUR/USD gaining around 15 pips to 1.0775. Other riskier currencies also made gains against the USD, with the AUD the best performer, rising around 35 pips to 0.6566. EUR lost ground on all the European crosses, with the NOK the best performer, EUR/NOK falling 5 figures to 11.76.
Datawise, Eurozone Q3 GDP was revised down to -0.1% q/q as expected, and German industrial production maintained its weak performance in recent months, falling 0.4% m/m in October.