North American Summary and Highlights 6 August
Overview - The USD was firmer on a pick-up in Middle East risks.
North American session
Middle East tensions picked up on an Iranian proposal to bar vessels from the US, Israel and other nations labelled hostile from the Strait of Hormuz. This lifted oil and UST yields and the USD followed. USD/JPY pushed through 158 to touch 158.50. EUR/USD slipped to 1.1520 from 1.1540. EUR/GBP was weaker near .8560 but EUR/CHF firmer near .9360. USD gains versus the AUD and CAD however faded, leaving only marginal USD gains against both.
US data had little impact. Initial claims at 199k from 198k remain very low. Non-farm productivity rose a stronger than expected 1.4% in Q2 with unit labor costs at 1.3% softer than expected. June wholesale inventories rise by 0.2%, while sales fell by 3.0% after a 3.5% rise in May.
European session
FX remains in a wait and see mode, action largely within a ¼ % range today. Still waiting on the Iran deal story to play out, and then payrolls.
Swedish flash Jul CPIF comes in stronger than expected at 0.8% and mkt of 0.6%, above 0.5% Riksbank expectations, though still down from 1.3%y/y. Core (ex energy) 0.6% from 0.4% (mkt 0.3%), but still low. SEK a touch firmer, if more eying broader risk and oil. CHF marginally underperforming on day, interesting to see if that trend continues (re: carry switching)
DRC announces the ban on exports of copper and cobalt concentrates, with 3month transition, as part of its efforts to onshore processing to increase value capture, as well as tax revenues. Copper future gains around 1 ½ %. Oil prices pretty steady, waiting for the next move just below $80, equities narrowly mixed.