North American Summary and Highlights 17 October

North American session

After the ECB delivered an as expected 25bps ease EUR/USD nudged up briefly to the day’s high of 1.0874 but this had already faded before a stronger than expected set of US data gave the USD a lift. EUR/USD losses extended during Lagarde’s press conference to a low of 1.0811, before a modest correction to around 1.0825. USD/JPY spiked above 150 on the US data, and while this move was not sustained, later in the day USD/JPY strength resumed, settling near 150.25. GBP/USD had moved above 1.30 ahead of the ECB decision and while knocked back below by the US data regained a 1.3 handle later in the day, as EUR/GBP fell to .8320 from .8360. EUR/CHF in contrast was little changed. AUD and CAD were relatively quiet but USD/CAD reached 1.38, and AUD/CAD erased Wednesday’s losses. 

US retail sales rose by 0.4% in September, with a 0.5% rise ex autos and a strong 0.7% rise both ex autos and gasoline and in the control group that contributes to GDP. At the same time Initial claims fell to 241k from 260k and October’s Philly Fed bounced to 10.3 from 1.7. Later data had less impact. A 0.3% decline in September industrial production was due to the Boeing strike and hurricanes each taking 0.3% off the total. October’s NAHB homebuilders’ index saw a second straight monthly rise, to 43 from 41, and August business inventories rose by an as expected 0.3%. 

European morning session

The USD was generally not much changed in a quiet European morning, making marginal gains against the JPY and CAD and marginal losses against the EUR. EUR/CHF fell back 10 pips to 0.9390, and there were some gains for EUR/NOK, which gained 2 figures to 11.88, but in general the market was very steady. 

Eurozone final September CPI data was revised down to 1.7% y/y from 1.8%, while the August trade surplus was smaller than expected at EUR11bn on a seasonally adjusted basis.