North American Summary and Highlights 19 May
Overview - The USD was weaker after the Moody’s downgrade, but came off its lows in North America.
North American session
Equities opened weaker and UST yields opened higher after the Moody’s downgrade, but equities returned to near neutral and UST yields moved lower, despite hawkish Fed talk from Bostic, Williams and Jefferson. The USD moved off its lows, but remained weaker on the day. USD/JPY was stable near 145, but EUR/USD fell to 1.1235 from a high of 1.1288, while GBP/USD fell to 1.3350 from 1.34. AUD/USD was firmer at .6450, but USD/CAD, after slipping to a low of 1.319 rebounded to 1.3960. This saw AUD/CAD rising above .90.
European morning session
EUR/USD gained 80 pips through the European morning as the USD fell back across the board following the Moody’s downgrade at the weekend. The EUR gained ground on most crosses as well, with EUR/CHF up 40 pips to 0.9390, and EUR/GBP up a modest 10 pips to 0.8420. EUR was little changed against the scandis. AUD/USD gained 35 pips to 0.6445, while USD/CAD dropped 25 pips to 1.3945. USD/JPY dropped 35 pips to 144.85. US yields were generally higher, particularly at the long end, and equities were lower.
There was no news of any real note, with Eurozone April CPI unrevised at 2.2% y/y headline, 2.7% core.