North American Summary and Highlights 13 Feb

North American session

The USD surged higher through the North American session as US CPI came in stronger than expected, rising 0.4% core and 0.3% headline in January. The AUD was the biggest loser, falling more than 1% against the USD to 0.6450, while the JPY lost almost as much, rising almost 1% to 150.75. USD/CAD also rose by around 1% to 1.3575. EUR/USD fell less than a figure to test 1.07.

The bulk of the USD’s gain came soon after the data but there was no significant correction. The afternoon saw UST yields extend their gains and equities extend their losses. The USD gained momentum in the afternoon versus JPY, AUD and CAD while EUR and GBP were more stable. 

Ahead of the CPI the NFIB small business optimism fell to 89.9 in January from 91.9, reaching its lowest since May. 

European morning session

A weaker CHF and a stronger GBP were the main features of the European morning session. The CHF weakened after January Swiss CPI came in much weaker than expected at 1.3% y/y against market consensus of 1.7%. EUR/CHF rose more than half a figure to a high of 0.9493 before dropping back to 0.9480. 

GBP was stronger after slightly stronger than expected labour market data, which saw average earnings growth fall to 5.8% (including bonuses), slightly less than expected, and the unemployment rate fall sharply to 3.8% helped by a decline in the active labour force. EUR/GBP fell around 30 pips but held just above 0.85. 

Otherwise, the USD finished the session not much changed against the EUR, JPY and AUD after reversing some initial gains.