North American Summary and Highlights 11 September
Overview - The USD was little changed overall, as lower oil prices offset a stronger than expected US core CPI.
North American session
The USD bounced as US core CPI came in stronger than expected at 0.3% in August, though overall CPI at 0.4% was as expected. The bounce did not last long as slippage in oil prices eased inflationary concerns, and the USD moved below pre-CPI levels, before recovering to near pre-data levels in the afternoon. September’s preliminary Michigan CSI slipped to 47.8 from 51.7, but inflation expectations picked up, particularly on the 1-year view.
USD/JPY slipped to 153.70 from 154 while EUR/USD remained close to 1.16. EUR/GBP saw further slippage to .8575 as GBP/USD rose to 1.3525 from 1.35. EUR/CHF in contrast was firmer, at .9470 from .9450. AUD/USD was little changed near .7175 though USD/CAD saw marginal gains.
European session
FX holding pretty mixed to steady ahead of the much-awaited US CPI release. EUR/USD holds around the 1.16~ anchor with a marginal downside lean into the data. Options not that heavy today with a slight downside skew, largely expiries focused on 1.1575. USD/JPY still consolidating in the 154-154 ½ area after the recent oversold fast decline waiting for the next short-term impetus.
UK GDP data shows an upside surprise at 0.4% m/m. vs market expectations of flat in July to lift the y/y rate to 1.6%, bolstered by services. Relatively minor GBP reaction but it helps keep the current EUR/GBP range top capping in place, the cross lent back from 0.86/0.8620.
NOK continues to see a little profit taking after a sustained run from Jun-Sep down to its various pair/NOK lows. Oil prices seeing some correction after Thursday’s high volume surges, Brent front month $100/102-top break to near $110 leap yesterday pulled back to around $104. Bonds also seeing some minor pullback from Thursday’s yield surges with US10s back from 4.98%~ to 4.94%.