North American Summary and Highlights 27 June
Overview - JPY and CHF were weak, despite the USD being restrained by data that was on balance softer than expected.
North American session
US data was mixed but on balance on the weak side of expectations, despite a fall in 6k fall in initial claims and marginal upward revisions to Q1 GDP and core PCE prices. Weakness is visible in a wider advance goods trade deficit of $100.6bn from $98.0bn and core durable goods orders for May, with ex transport orders down by 0.1% while overall orders rose by 0.1%. Later Fed’s Bostic saw one rate cut this year but welcomed recent inflation data, while pending home sales fell by 2.1% in May.
UST yields fell and the USD saw some slippage, EUR/USD moving above 1.07 to 1.0725 before correcting to settle just above 1.07. However after a brief dip to 160.30 USD/JPY pushed back up to around 106.80. EUR/CHF was firm, advancing to .9620 but EUR/GBP gains faded. AUD/USD was marginally weaker near .6650 and USD/CAD was little changed after peaking at 1.37.
European morning session
A fairly quiet European morning session saw the USD gain around 10 pips against the JPY, and lose around 10 pips against GBP and CAD. EUR/SEK rose a couple of figures to 11.32 after a more dovish than expected Riksbank statement which suggested potential for three rather than two rate cuts this year. EUR/NOK went in the opposite direction, losing around 2 figures so that NOK/SEK was the biggest mover on the morning.
Datawise, Eurozone money data was essentially in line with expectations, with M3 rising 1.6% y/y in May and household loans up 0.3% y/y. The European Commission June survey was marginally on the weak side of expectations, but still showed broadly steady sentiment.