North American Summary and Highlights 28 May
Overview - The USD slipped on a report of a deal between the US and Iran, though Trump’s approval is still needed.
North American session
The USD slipped in North America largely on a report from Axios that US and Iranian negotiators had reached a deal to extend the ceasefire for 60 days and start negotiations on Iran’s nuclear program, while reopening the Strait of Hormuz, though Trump’s approval was still needed.
US data was also on balance on the soft side of expectations, with core PCE prices up a lower than expected 0.2% in April, with a weak unchanged personal income outcome which was well below an as expected 0.5% rise in spending. Q1 GDP revised down to 1.6% from 2.0% and weekly initial claims rose to 215k from 210k. April durable goods orders were however strong, up by 7.9% and 1.1% ex transport. Later a 6.2% fall in April new home sales to 622k was announced. Comments from Fed’s Williams were quite moderate, outweighing a more hawkish tone from Musalem, who has no vote in 2026.
USD/JPY fell below 158.30 from above 158.40, while EUR/USD rose to 1.1650 from 1.1630. There was little movement in EUR/GBP but EUR/CHF fell to .9130 from .9150. AUD/USD advanced to .7160 from .7125 while USD/CAD slipped to 1.3780 from 1.3850.
European session
The European morning largely consolidated and slightly faded the overnight action. Oil currently proving very capped towards the May lows.
The market is tending to fade any blips on fresh skirmishes for now - at least so long as there’s no indication that talks have stopped proceeding. Oil overnight gains halved to around $1.5, and nearer yesterday’s lows than highs.
FX action very dull accordingly, the dollar only modestly in the plus still. Recent realised action and lack of decisive drivers tending to see volatility further collapse.
Cable a touch softer but largely looking a case of further range action on EUR/GBP, as it has been lifting back off the well-established band floor in recent sessions again.
In terms of data, not a huge amount of interest. Italian May consumer confidence above expectations at 93.4 from 90.8 (mkt 90.1). Norway mainland GDP +0.2%q/q in Q1 vs mkt 0.3%.