North American Summary and Highlights 27 Feb
Overview - Despite a strong US PPI, the USD was mostly weaker, with negative risk appetite sending equities and UST yields lower.
European and North American sessions
The USD recovered from an early dip in the European morning and saw a modest bounce on a strong US PPI, up 0.5% in January, 0.8% ex food and energy, though the gain ex food, energy and trade of 0.3% was relatively moderate. The USD bounce was however not sustained, even with a strong February Chicago PMI index of 57.1 from 54.0 hinting at firmer ISM manufacturing data on Monday. UST yields turned lower in the afternoon, EUR/USD rising to 1.1825 after briefly dipping below 1.18 on the PPI data. USD/JPY was stable near 156.
Domestic political risk weighed on the GBP but GBP/USD reversed most of its losses in the North American afternoon , recovering to near 1.35, while EUR/GBP corrected to near .8765 after rallying to .8790 from .8750. Q4 Canadian GDP was weaker than expected at -0.6% annualized but details were mixed and the data had little sustained impact. With oil firm on Iran tensions USD/CAD fell to 1.3630 from 1.3680 while risk off sentiment saw EUR/CHF fall .9080 from .9120. AUD/USD recovered from a brief dip below .71, to .7120.