Forex - US North American Summary and Highlights 13 Aug


 20:19 (GMT) 13 Aug

  [Forex Highlights]

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Overview

US North American Summary and Highlights 13 Aug (0101-NJSF-C04)

Risk appetite surged after the US delayed some of its tariffs on China to December 15. This supported the USD, particularly USD/JPY, though the commodity currencies advanced. UST yields rose though more at the front end.

News highlights

- US Jul CPI +0.3% as exp, ex food and energy +0.3% vs 0.2% exp.

- US delays some tariffs on China to December 15.

Currencies:

US North American Summary and Highlights 13 Aug (0101-NJSF-C01)

USD/JPY bounced sharply on the news that the US had delayed some tariffs on China to Dec, shortly after getting a modest lift from near 105.00 on the news that the US and China would talk in 2 weeks. The bounce got close but not quite to 107.00, but there was little subsequent room below 106.50. Before the focus turned to trade optimism a firmer than expected US core CPI gave the USD only a brief and marginal lift.

While the biggest move was on USD/JPY, commodity currencies also bounced on the tariff delay. USD/CAD, having risen to near 1.33 after the US CPI, saw a brief dip below 1.32. AUD/USD rallied from around .6750 above .68 before settling near the figure. AUD advanced versus CAD and NZD, but AUD/CAD could not hold above .90.

US North American Summary and Highlights 13 Aug (0101-NJSF-C02)

The USD had been pressured by risk aversion through the European morning EUR/USD quickly bouncing back above 1.12 despite an initial dip lower on a weak ZEW print of -44,1, the lowest since 2011. A return below 1.12 was seen as the USD gained on trade optimism. EUR/CHF had fallen to new 2 year lows below 1.085 before rebounding above 1.09. EUR/NOK slipped sharply as oil rallied after having earlier broken back above 10.0.

UK average earnings growth and employment growth were both on the strong side of expectations but declining vacancies and a rise in unemployment were an offset. GBP saw little response to the data.

Bonds:

US North American Summary and Highlights 13 Aug (0101-NJSF-C03)

A delayed implementation of tariffs on certain Chinese imports provided some respite to US equities reversing initial bond gains despite a stronger than expected US July CPI and a further plunge by the Argentinian Peso. US 10y yields rose by 4bp to 1.685% while the US curve a bear-flattened as the short end cheapened while US 30y yields rose by 1.5bp to 2.145% flattening 10s30s by 2.5bp to 46bp.

Agency Spreads: Freddie/Fannie 5s +0.5/+1.7 bps, 10s +0.9/+1.7 bps.

Swap Spreads: 2s -0.11bps, 5s +0.29bps, 10s +0.97bps.

Equities

US equites, earlier focused on continued risk in Hong Kong and Argentina, surged on the news that the US had delayed some tariffs on China to December 15, technology leading broad based gains, financials and consumer discretionary also strong.

To Be Released -

Data

23:50 GMT - JP: Core Machine orders (Jun) 4cast: -3.4% y/y (Mkt: -1.1 Prev: -3.7)

01:30 GMT - AU: Wage Price Index (Q2) % q/q (Mkt: 0.5 Prev: 0.5)

06:00 GMT - DE: GDP (sa) (2Q P) % q/q (Mkt: -0.1 Prev: 0.4)

06:00 GMT - DE: GDP (wda) (2Q P) % y/y (Mkt: 0.1 Prev: 0.7)

06:00 GMT - FI: GDP (Jun) % (Mkt: Prev: 0.8)

06:45 GMT - FR: CPI (Jul F) % m/m (Mkt: -0.2 Prev: -0.2)

06:45 GMT - FR: CPI (Jul F) % y/y (Mkt: 1.1 Prev: 1.1)

06:45 GMT - FR: HICP (Jul F) % m/m (Mkt: -0.2 Prev: -0.2)

06:45 GMT - FR: HICP (Jul F) % y/y (Mkt: 1.3 Prev: 1.3)

07:30 GMT - NL: GDP (Q2 P) % q/q (Mkt: 0.3 Prev: 0.5)

07:30 GMT - NL: GDP (Q2 P) % y/y (Mkt: Prev: 1.7)

07:30 GMT - SE: CPI (Jul) 4cast: 1.6% y/y (Mkt: 1.5 Prev: 1.8)

07:30 GMT - SE: CPIF (Underlying) (Jul) 4cast: 1.5% y/y (Mkt: 1.4 Prev: 1.7)

08:30 GMT - UK: CPI (Jul) 4cast: -0.2% m/m (Mkt: -0.1 Prev: 0)

08:30 GMT - UK: CPI (Jul) 4cast: 1.8% y/y (Mkt: 1.9 Prev: 2)

08:30 GMT - UK: Input Prices (nsa) (Jul) % m/m (Mkt: 0.5 Prev: -1.4)

08:30 GMT - UK: Input Prices (nsa) (Jul) % y/y (Mkt: 0.2 Prev: -0.3)

08:30 GMT - UK: Output Prices (unadj.) (Jul) % y/y (Mkt: 1.7 Prev: 1.6)

08:30 GMT - UK: Output Prices Core (unadj.) (Jul) % m/m (Mkt: 0.1 Prev: 0.1)

09:00 GMT - EU: GDP (SA) (2Q P) % q/q (Mkt: 0.2 Prev: 0.2)

09:00 GMT - EU: GDP (SA) (2Q P) % y/y (Mkt: 1.1 Prev: 1.1)

09:00 GMT - EU: Industrial production (Jun) % y/y (Mkt: -1.3 Prev: -0.5)

12:30 GMT - US: Import Price Index (Jul) % m/m (Mkt: -0.1 Prev: -0.9)

Events and Auctions

08:45 GMT - ES: Bonds Auction

23:00 GMT - AU: RBA's Debelle speaks in Sydney


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