North America Summary and Highlights 15 Jan

North American session
A generally quiet North American session due to the US holiday saw relatively little FX movement. However, the Bank of Canada’s Q4 business and consumer surveys made for some interesting reading. The business survey showed clear signs of weakness. A net 39% of firms said their sales volumes had fallen over the last 12 months – the largest since the GFC (excluding the pandemic). The consumer survey showed consumers believe inflation has fallen, but their expectations for inflation in the near term are showing little progress in returning to pre-pandemic levels. Slow progress may be due to persistently high inflation expectations for services such as rent.
European morning session
The USD moved higher in a quiet European morning session. EUR/USD fell 25 pips to 1.0935,while the AUD was the weakest performer, falling around 0.5% from 0.6690. Other risky currencies broadly matched the EUR decline, while the JPY and CHF slightly outperformed, thughboth also lost a little ground against the USD.
There wasn’t a great deal of news. Swedish CPI was a little stronger than expected in December, with the targeted CPIF measure at 2.3% against the market consensus of 2.2%. However, there were big base effects, which mean this y/y rate was a lot lower than the 3.6% in November. The SEK initially edged a little lower on the news, but finished the morning little changed against the EUR. 
Otherwise, another weak Eurozone industrial production number, falling 0.3% m/m on November, saw the y/y rate decline to -6.8%, equalling the post-pandemic low. However, the Eurozone trade balance was in larger surplus than expected at EUR20.3bn In November, with the seasonally adjusted balance of 14.8bn the best since 2021.
Swiss sight deposits showed an unexpectedly large rise of CHF7.4bn in the latest week, the largest rise for 6 months, possibly indicating some SNB buying of FX.