North American Summary and Highlights 9 Jan
Overview - The USD saw modest gains after a mixed US employment report, notably versus JPY and CAD.
North American session
US December employment data was mixed. Payrolls rise by a slightly weaker than expected 50k with 76k in negative back month revisions, but unemployment fell to 4.4% with November revised to 4.5% from 4.6%. Average hourly earnings with a 0.3% rise were as expected, but November was revised up to 0.2% from 0.1%. The USD saw some slippage after the data but eventually moved a little higher. EUR/USD at 1.1635 was down only 10 pips from pre-data levels while GBP/USD fell to 1.34 from 1.3420. USD/JPY saw fresh highs above 158 from 157.50 before a modest correction, a report that Japanese PM Takaichi was considering calling a February election assisting the move.
There was no US Supreme Court announcement on tariffs. Wednesday January 14 is the next day for Supreme Court announcements, but it is unclear whether that will include a verdict on tariffs. January’s preliminary Michigan CSI at 54.0 from 52.9 was slightly stronger than expected.
Canada’s employment report with a December rise of 8.2k was slightly stronger than expected but unemployment at 6.8% reversed most of a November decline to 6.5% from October’s 6.9%. USD/CAD rose above 1.39 while AUD/CAD advanced to .93 with AUD/USD edging marginally higher to .6690.
European morning session
The USD extended overnight gains against the JPY, with USD/JPY up 20 pips to 157.65, and AUD/USD also slipped another 10 pips to 0.6680, but European currencies were broadly stable against the USD. The NOK made some early gains after stronger than expected December Norwegian CPI, which showed core inflation at a higher than expected 3.1%. EUR/NOK dropped 5 figures on the news to a low of 11.71, but fully reversed the decline by the end of the morning. EUR/SEK actually did move a couple of figures lower, helped by a stronger than expected 0.9% rise in GDP in November, so that NOK/SEK finished the morning down 15 pips at 0.9135 after initially making gains to 0.9175.
As well as Norwegian CPI, we had German manufacturing output which came in stronger than expected, gaining 0.8% m/m. French consumer spending was slightly weaker than expected in November, but Eurozone retail sales were stronger than expected, up 2.3% y/y.