North American Summary and Highlights 15 Jul
Overview - The USD, with UST yields, rebounded to finish higher after a brief dip on a slightly softer than expected US core CPI.
North American session
US June CPI was as expected at 0.3% overall, but lower than expected at 0.2%, 0.228% before rounding, ex food and energy. The USD and UST yields saw an initial modest dip on the data but subsequently rebounded, with some components of goods seeming to get a lift from tariffs. EUR/USD fell to 1.16 after peaking just below 1.17, while USD/JPY reached 149 from near 147.75. EUR/GBP was softer near .8665.
Canadian CPI was as expected at 1.9% from 1.7% and with the core rates stable to higher was seen as arguing against a July BoC easing. USD/CAD rose to 1.3715 from 1.3675 but AUD/CAD was lower near .8940 after peaking at .8995.
July’s Empire State manufacturing survey, released with the CPI, was stronger at 5.5, its first positive since February, from -16.0 in June. Trump announced a trade deal with Indonesia under which Indonesia would pay a 19% tariff while committing to buy a variety of US goods.
European morning session
A quiet European morning session saw EUR/USD little changed around 1.1680/85 and USD/JPY at 147.65/70. GBP managed a modest gain, with EUR/GBP dropping around 10 pips to 0.8685, retreating from a test of 0.87. AUD/USD was also firmer, gaining 15 pips to 0.6565. Scandis were softer with EUR/SEK and EUR/NOK both gaining 3 figures, while EUR/CHF dipped marginally below 0.93, hitting its lowest since May. USD/CAD was not much changed.
The only data was the German ZEW survey, which showed another rise in the expectations index to its highest level since 2022, although the survey will have been done before the latest tariff news. The current conditions index also recovered strongly to its best for 2 years. But there was no reaction in the currency. Eurozone industrial production data was also stronger than expected, rising 1.7% m/m in May.