North American Summary and Highlights 16 July

North American session

The first round of US data was positive. June retail sales at +0.2%, -0.2% ex autos was as expected but a 0.4% increase ex autos and gasoline showed underlying consumer resilience persisted. July’s Philly Fed manufacturing index at 41.4 from 10.3 was very strong while initial claims fell t 208k from 216k. A second round of data, a 5.4% fall in June pending home sales, and a fall in July’s NAHB homebuilders’ index to 34 from 36 was weaker, but of less importance.

EUR/USD slipped to 1.1440 from 1.1460 with EUR/GBP remaining off recent lows. USD/JPY rose to 162.40 from 162.20. AUD/USD slipped back below .70. USD/CAD bounced to 1.4050 after a dip to 1.4020.

European session

European morning largely consolidating yesterday’s late burst of action in terms of dollar leakage and GBP gains.

UK May GDP 0.1%m/m, largely as expected, if with back revisions seeing a slightly higher rolling 3m/3m rate but similar yr/yr rate. GBP got a bit overbought intraday in Wednesday’s breakout higher and so backfilling somewhat, cable off around ¼ %. EUR/GBP also some 30 ticks off yesterday’s 0.8450~ test low and back above the .8465 retracement level on some intraday unwinding.

BoE’s Breeden quite dovish, says "We have a softish economic outlook; we have slack in the labour market… those two things mean that that shock is less likely to become embedded and lead to inflationary dynamics that we might need to lean against."