North American Summary and Highlights 17 Feb
Overview - A slightly firmer USD, as equities impacted by AI concerns over profitability and disruption to existing industries.
North American session
The entry of N American trading saw the USD push higher across the board, as concerns that AI was becoming a more mixed force for U.S. equities prompted a mild risk off tone. The volatile of software stocks and uncertainty over hyperscalers CAPEX v AI revenue growth continues to dominate for now. However, traders note that the USD should stabilise into mid-week, as the Q4 U.S. GDP release is a swing factor that could push the USD either way – Friday could also possibly see a supreme court ruling on reciprocal tariffs.
European morning session
In Europe the main movements was for GBP, with the latest official and HMRC labor market figures showing rising unemployment/falling vacancies and slowing wage inflation. Expectations of a 25bps March cut are now up to 80%, which is in sharp contrast to other DM countries. Though GBP bounced mid-morning, it then fell away again into midday. Other DM currencies were directionless in the morning.