North American Summary and Highlights 4 June
Overview - The USD slipped in Europe but retraced most of its losses in North America.
North American session
With a cease fire deal between Israel and Lebanon’s government not being accepted by Hezbollah, the USD retraced most of its European losses. USD/JPY moved back to 160 and stabilized there, while EUR/USD slipped back below 1.1620 after peaking above 1.1640. EUR/GBP was marginally firmer but EUR/CHF softer. AUD/USD saw only a marginal correction from modest European gains holding near .7140 while USD/CAD was fairly stable near 1.39. Equities were firmer.
US initial claims saw a bounce to 225k from 212k in a week that included the Memorial Day holiday. Q1 US non-farm productivity was revised down to 0.3% from 0.8% as were , more surprisingly, unit labor costs, to 1.8% from 2.3%.
European session
Slight dollar drift-off from the latest Iran/ Lebanon news but the market proving reluctant to give up on a defensive mood. Oil off around -$1.5. EUR/USD up a fraction from recent 1.16 support, continues tight ranging. Expiries today tending to play to the inertia. USD/JPY sits off 160. Reuters BoJ sources report suggest a June rate hike, already implied by BoJ Ueda’s comments on Wednesday. After a slow start, higher beta SEK does manage to grind out a bounce on the morning, USD/SEK -0.5%~
Swedish CPIF coming in above expectations at 1.5% (mkt 1.3%), albeit still below Riksbank thinking. Swiss CPI soft again at 0.2%m/m (mkt 0.3%), just 0.6%y/y. EUR/CHF doesn’t hold onto a minor uptick. Not a market focus but UK construction PMI notable, down to 38.2 from 40.2, weakest result in 6 years. EZ construction PMI modestly higher in May at 43.7 vs 41.7.