North American Summary and Highlights 9 Apr
Overview - The USD slipped in Europe but recovered as equities came under some pressure.
North American session
The US session saw little fresh news though equities came under some pressure before recovering late in the session, while UST yields slipped without much of a correction, even with a weak 3-year auction.
The USD was under pressure early led by UST yields, but as equities slipped EUR/USD fell from 1.0885 to test 1.0850, while GBP/USD fell from 1.27 to 1.2670. A bounce in USD/CAD from 1.3550 found sellers at 1.36, while AUD/USD slipped to .6625 after peaking at .6644. USD/JPY briefly dipped below 151.60 but ended little changed near 151.75 as equities came off their lows.
European morning session
A quiet European morning saw the USD edge a little lower across the board, but the riskier currencies outperformed, with AUD and GBP the best performers. AUD/USD gained around 15 pips to 0.6625. EUR/USD was only around 5 pips higher at 1.0865, while GBP outperformed, with EUR/GBP dipping 15 pips to 0.8567. USD/JPY and USD/CAD saw only modest declines.
The main news was the European bank lending survey. While there may be few positive straws in the wind in the latest (April) 2024 bank lending survey (BLS), the ECB should find the balance of results still troubling. Company credit demand slumped afresh amid rising interest rates and deferred capex plans. There was a positive in a fall in credit standards for mortgage lending but this was almost exclusively a French rather than EZ-wide development and came alongside still falling demand (amid what are now falling EZ house prices). There wasn’t much else of note, but late in the morning the US NFIB survey was released, showing a decline in optimism to new 11 year lows.