North American Summary and Highlights 11 September

North American session

The USD bounced on a stronger than expected 0.3% increase in core CPI, though overall CPI was on consensus at 0.2%. The USD sustained its bounce overall, but price action was mixed. USD/JPY bounced to peak above 142.50 from 141.75 before fully reversing its gain, but eventually rebounding to 142.35, these moves in line with those of UST yields. 

EUR/USD slipped from 1.1050 to test 1.10 while GBP/USD slipped from 1.3090 to test 1.30 before both saw partial corrections. EUR advanced against both GBP and CHF. AUD and CAD fully reversed initial losses versus the USD to end slightly firmer as equities more than fully erased their post-data losses and oil advanced. 

European morning session

EUR/GBP and EUR/NOK both moved lower in what was otherwise a fairly quiet European morning session. GBP gained after the UK labour market data, even though the data was somewhat mixed, with stronger official employment data in the 3 months to July offset by weaker data from the more up to date HMRC numbers. Average earnings growth was similarly mixed, with the official data showing a slightly larger than expected fall to 4.0% y/y in the 3 months to July, while the HMRC data showed a rise to 6.2% y/y in August. EUR/GBP fell around 20 pips to 0.8425, while front end UK yields were little changed.

EUR/NOK fell quite sharply through the morning, dropping 6 figures or more than 0.5% to 11.92 from opening levels in spite of slightly weaker than expected CPI data, which showed the core rate easing to 3.2% y/y in August. The initial response had been a small rise towards 12, but this was quickly reversed. 

Otherwise, markets were fairly quiet, with EUR/USD not much changed and USD/JPY reversing some early gains.