Forex - US North American Summary and Highlights 9 Nov


 21:06 (GMT) 09 Nov

  [Forex Highlights]

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Overview

US North American Summary and Highlights 9 Nov (0101-FYKR-C04)

The USD maintained its positive post-FOMC tone though weak equities kept USD/JPY below 114 and outweighed a strong PPI to send UST yields lower. Weak oil weighed on the CAD, and politics on the GBP.

News highlights

- US Oct PPI +0.6% vs 0.2% exp, ex food and energy +0.5% vs 0.2% exp, ex food, energy and trade +0.2% as exp.

- US Nov prelim Michigan CSI fell to 98.3 from 98.6 vs 98.0 exp.

- US Sep wholesale inventories +0.4% vs 0.3% exp, sales +0.2% vs 0.4% exp.

Currencies:

US North American Summary and Highlights 9 Nov (0101-FYKR-C01)

The better USD tone didn't extend far enough to put any pressure on the year to date low for EUR/USD at 1.1297. Strong US PPI data was largely ignored. Limited upside for USD/CHF however saw EUR/CHF slip back below 1.14.

The latest retreat for equities ensured no repeat of the overnight run over 114.00 for USD/JPY. EUR/JPY went from Thursday's battle with the 130 handle to a battle with 129.00.

EUR/GBP still struggles to hold breaks below .8700 as 1.1500 remains toppish on GBP/EUR (.8695). UK data was mixed but main take-away for the BoE likely another drop in business investment. The resignation of UK Minister Jo Johnson (brother of Boris but not a Brexit backer) added to pressure on the GBP, Cable back below 1.3000.

US North American Summary and Highlights 9 Nov (0101-FYKR-C02)

CAD ended a bad week with USD/CAD moving above 1.32 on lower crude and the Keystone pipeline suspension making the hawkish Poloz comments earlier in the week fade from memory. AUD and NZD are well off their highs but easily outperforming CAD on the week.

NOK is weaker on crude and weaker than expected CPI. EUR/NOK bounced on the release, that dragging EUR/SEK higher to test the 10.2840 level that had taken so long to break.

Bonds:

US North American Summary and Highlights 9 Nov (0101-FYKR-C03)

USTs saw yields checked back from Thursday's post Fed test of the yield highs at the short end, as equities ran into some profit-taking into the w/e, S&P easing back from the near 100dma test & oil also weak. The higher PPI prints only briefly helped yields off the lows, while US Atlanta Fed wage growth of 3.7% yr/yr in Oct, highest since 2016, didn't register as pullback extends. 2s -3.5bps @ 2.93%, 5s -4.9bps @ 3.04%, 10s -5.0bps @ 3.19%, 30s -4.3bps @ 3.39%.

Agency Spreads: Freddie/Fannie 5s -0.3/0.0 bps, 10s -0.1/+0.2 bps.

Swap Spreads: 2s +1.28bps, 5s +0.95bps, 10s +0.46bps.

Equities:

Equities moved steadily lower on Friday, PPI data in China causing concern because of its weakness, and PPI data from the US causing concern because of its strength. Oil prices were watched but the decline was led by technology rather than energy.

To Be Released -

Data:

23:50 GMT - JP: PPI (Oct) % m/m (Mkt: 0.1 Prev: 0.3)

23:50 GMT - JP: PPI (Oct) %y/y (Mkt: 2.8 Prev: 3)

07:30 GMT - FR: BoF Business Sentiment (Oct) (Prev: 105)

09:00 GMT - IT: Industrial Production (sa) (Sep) % m/m (Prev: 1.7)

09:00 GMT - IT: Industrial Production (wda) (Sep) % y/y (Prev: -0.8)

Events & Auctions:

CA: Market Holiday - Remembrance Day (exch Open)

US: Market Holiday - Veterans' Day (exch Open)

10:00 GMT - IT: 365 Day Bills Auction

10:30 GMT - DE: 147-Day Bills Auction (EUR 2bn)

11:00 GMT - DE: German Finance Minister Scholz Speaks in Berlin

13:50 GMT - FR: Bills Auction


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