North American Summary and Highlights 9 December
Overview - Focus was on gains in Chinese equities which were not matched by the US equity markets. The USD ended slightly firmer, led by USD/JPY.
North American session
North American trade saw continued gains in USD/JPY, rising to a high of 151.35 before settling near 151.25. Movements in other currencies had less direction. Gains in EUR/USD and GBP/USD peaked near 1.06 and 1.28 respectively before slipping back to end little changed near 1.0550 and 1.2750. USD/CAD saw an early dip below 1.41 before ending firmer near 1.4170. AUD/USD gains extended to .6470 before slipping back to .6435. UST yields were firmer but equities slipped.
There was little news, though a New York Fed survey showed slightly higher inflation expectations and increased consumer optimism in November.
European morning session
The EUR gained 40pips against the USD and a big figure against the JPY through the European morning, with the gains triggered by a sharp rise in Chinese equities at the open. The Politburo was quoted as saying on Monday that China will adopt an "appropriately loose" monetary policy next year, the first easing of its stance in some 14 years, alongside a more proactive fiscal policy to spur economic growth. China will step up "unconventional" counter-cyclical adjustments, focusing on expanding domestic demand and boosting consumption, state media Xinhua reported. The remarks came ahead of the annual Central Economic Work Conference in the coming days to set key targets and policy intentions for next year.
Other riskier currencies also made gains. AUD/USD gained around 1% to trade near 0.6450, and the CAD and NOK also rallied, albeit more modestly. GBP/USD gained 60 pips to 1.2780.There was little European news, with the Sentix investor confidence index the only data, and this showed a decline in December to its lowest for a year.