North American Summary and Highlights 5 November
Overview - The USD was mixed as equities came under pressure.
North American session
The USD was mixed with pressure on equities, tech in particular, the main theme of the day. Initial claims were very low at 189k. Q3 non-farm productivity saw a stronger than expected 3.6% increase assisting a 0.7% decline in unit labor costs.
USD/JPY slipped below 158 from 158.50 but EUR/USD was softer near 1.1230. EUR/JPY fell to near 177. USD/CAD advanced above 1.40 and AUD/USD fell below 0.695. There was not a big market reaction to the 25bps BoE rate hike.
European session
A relatively contained, settling European morning after some sharp second-reaction moves to the election results on Wednesday. Focus point one, oil, in particular currently consolidating the steep 10% drop to retest the recent lower $85-90 base on shifting scenario weightings on the Iran/geopolitically implications. Dollar had a little follow through in Asia but flattening this morning so far. Broader dollar index holding so far above the 101~ pullback support.
The other remaining post-election focal point remains chips/AI-build out and Kospi for instance had another 5% down session towards the YTD lows. Nasdaq -0.5% though mid territory within yesterday’s very wide bar. S&P flat and nearer yesterday’s big bounce highs, reflecting this fork in current risk drivers.
NOK/SEK bounces 1/2 % from recent pullback. Norges Bank keeps policy unchanged while signaling more willingness to tighten further is inflation remains high. Swedish CPIF flash also soft at 1.1% from 1.5% vs mkt 1.4%, with ex energy 0.1% from 0.5%. Puts Riksbank action and stance in stark contrast. Focus turns next to the BoE with a hike 100% expected and focus on Inflation Report and presentation of the move. EUR/GBP up just a fraction prior, with very minor positioning for a dovish hike prior.