North American Summary and Highlights 17 Jan

North American session
The USD continued to make gains in the North American session, before a late correction. The JPY and the AUD remained the two currencies suffering the most. USD/JPY gained around 80 pips to 148.50, while AUD/USD fell 30 pips to 0.6530 before marginal corrections. European pairs also saw some slippage, but much more modestly, and by the end of the session were back near the day’s highs.
The USD and UST yields were lifted by stronger than expected US retail sales for December, which rose by 0.6%, 0.4% ex autos, with the control group, which contributes to GDP, particularly strong at 0.8%. A subsequent 0.1% rise in December industrial production was marginally above consensus and a rise in January’s NAHB homebuilders’ index to 44 from 37 more significantly so. The Fed’s Beige Book however painted a fairly subdued picture, though confirmed consumer resilience and optimism for lower rates.

European morning session
The USD was generally not much changed through the European morning, but GBP made some modest gains after a stronger than expected December CPI number, while the scandis extended the decline seen since the start of the week. 
UK December CPI came in at 4.0% headline, 5.1% core, both higher than expected, but the core number was unchanged from the November y/y gain, and the headline only 0.1% above. Some of the rise was due to higher tobacco duties, and the annual inflation rate is still below where the BoE expected it at the time of the November MPR, so the data was of limited significance, Nevertheless, UK yields rose strongly in response, and EUR/GBP fell back around 40 pips to 0.8575. 
There was no particular trigger for scandi losses, but both the NOK and SEK continues to slip lower against the EUR, which gained around 3 figures against both.