Forex - US North American Summary and Highlights 13 Jun


 20:08 (GMT) 13 Jun

  [Forex Highlights]

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Overview

US North American Summary and Highlights 13 Jun (0101-BKRT-C04)

The FOMC was seen as hawkish with the dots for 2018 and 2019 getting a nudge higher but a bounce in the USD was largely erased as equities slipped. USTs came under some pressure, with a flattening tone persisting.

News highlights

US North American Summary and Highlights 13 Jun (0101-BKRT-C01)

- US May PPI +0.5% vs 0.3% exp, ex food and energy +0.3% vs 0.2% exp.

- FOMC raised rates by 25bps as expected, dots lifted to 4 hikes in 2018 from 3, though this came from a change in the view from just one individual.

Currencies:

US North American Summary and Highlights 13 Jun (0101-BKRT-C02)

Ahead of the FOMC, the USD lost ground that it had gained late on Tuesday, though EUR/USD remained below 1.18 and USD/JPY well above 110.00 if back below 110.50. CAD was supported by a larger than expected EIA crude inventory draw.

GBP was a little softer after May CPI came in at 2.4%, unchanged from Apr. EUR/GBP regained the .88 handle but Cable more than fully erased a dip that got as far as 1.3306, a low that held after the post-Fed reaction.

The initial response to the FOMC was to buy the USD on the shift higher in the 2018 and 2019 dots, taking EUR/USD to a low of 1.1723 and USD/JPY to a high of 110.84, the highs coming soon after Powell started the press conference. However a correction followed, largely erasing the USD gains, EUR/USD reaching 1.18 as eyes turned towards the ECB and equities slipped.

After the FOMC decision EUR/GBP saw a positive tone resume if not to fresh highs while losses in AUD/CAD extended to fresh lows on the day.

The USD rally did not last long enough to put USD/CHF over .9900, EUR/CHF sticking close to 1.1600. EUR/SEK and EUR/NOK are very little changed. Sweden has inflation due Thursday.

Bonds:

US North American Summary and Highlights 13 Jun (0101-BKRT-C03)

FOMC delivered algos a hawkish set of headlines - lifting the dots for this year and next (though unchanged for 2020 and long-term), keeping the reference to policy being accommodative and dropping the long standing reference to policy being below neutral for some time. Yields were lifted across the curve but a flattening persisted with the long end having been stronger ahead of the decision and seeing more of a subsequent correction. 2s +3.3bps @ 2.57%, 5s +2.7bps @ 2.84%, 10s +1.5bps @ 2.98%, 30s +0.6bps @ 3.10%

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

Swap Spreads: 2s -0.12bps, 5s -0.12bps, 10s +0.08bps.

Equities:

Equities traded cautiously ahead of the FOMC with the NASDAQ outperforming. There was modest selling in response to the hawkish Fed which gained momentum later, Trump stating he may upset China on trade.

To Be Released -

Data

23:01 GMT - UK: RICS Housing Survey (May) % (Mkt: -5 Prev: -8)

01:30 GMT - AU: Employment (May) chg k (Mkt: 19 Prev: 22.6)

01:30 GMT - AU: Participation Rate (May) % (Mkt: 65.6 Prev: 65.6)

01:30 GMT - AU: Unemployment (May) % (Mkt: 5.5 Prev: 5.6)

04:30 GMT - JP: Capacity Utilisation (Apr) % m/m (Prev: 0.5)

04:30 GMT - JP: Industrial Production (Apr F) % m/m (Prev: 0.3)

04:30 GMT - JP: Industrial Production (Apr F) % y/y (Prev: 2.5)

04:30 GMT - NL: Trade Balance (Apr) bn (Prev: 5.3)

06:00 GMT - DE: CPI (May F) % m/m (Mkt: 0.5 Prev: 0.5)

06:00 GMT - DE: CPI (May F) % y/y (Mkt: 2.2 Prev: 2.2)

06:00 GMT - DE: HICP (May F) % m/m (Mkt: 0.6 Prev: 0.6)

06:00 GMT - DE: HICP (May F) % y/y (Mkt: 2.2 Prev: 2.2)

06:00 GMT - FI: CPI (May) % m/m (Prev: 0.2)

06:00 GMT - FI: CPI (May) % y/y (Prev: 0.8)

06:45 GMT - FR: CPI (May F) % m/m (Mkt: 0.4 Prev: 0.4)

06:45 GMT - FR: CPI (May F) % y/y (Mkt: 2 Prev: 2)

06:45 GMT - FR: HICP (May F) % m/m (Mkt: 0.4 Prev: 0.4)

06:45 GMT - FR: HICP (May F) % y/y (Mkt: 2.3 Prev: 2.3)

07:30 GMT - SE: CPI (May) % y/y (Mkt: 1.9 Prev: 1.7)

07:30 GMT - SE: CPIF (Underlying) (May) % y/y (Mkt: 2.1 Prev: 1.9)

08:30 GMT - UK: Retail Sales (ex Auto Fuel) (May) % m/m (Mkt: 0.3 Prev: 1.3)

08:30 GMT - UK: Retail Sales (ex Auto Fuel) (May) % y/y (Mkt: 2.5 Prev: 1.5)

08:30 GMT - UK: Retail Sales (inc Auto Fuel) (May) % m/m (Mkt: 0.5 Prev: 1.6)

08:30 GMT - UK: Retail Sales (inc Auto Fuel) (May) 4cast: % y/y (Mkt: 2.4 Prev: 1.4)

11:45 GMT - EU: ECB Deposit Rate (Jun-13) 4cast: -0.4% (Mkt: -0.4 Prev: -0.4)

11:45 GMT - EU: ECB Main Refinancing Rate (Jun-13) 4cast: 0% (Mkt: 0 Prev: 0)

12:30 GMT - CA: House Price Index (Apr) % m/m (Mkt: 0 Prev: 0)

12:30 GMT - US: Import Price Index (May) % m/m (Mkt: 0.5 Prev: 0.3)

12:30 GMT - US: Initial Claims (Jun-09) 4cast: k (Mkt: 223 Prev: 222)

12:30 GMT - US: Retail Sales (May) 4cast: 0.1 % m/m (Mkt: 0.4 Prev: 0.2)

12:30 GMT - US: Retail Sales (ex Autos) (May) 4cast: 0.3 % m/m (Mkt: 0.5 Prev: 0.3)

14:00 GMT - US: Business Inventories (Apr) % (Mkt: 0.3 Prev: 0)

22:30 GMT - NZ: BNZ-Business NZ PMI (May) (Prev: 58.9)

Events & Auctions

EU: EU Trade Chief Malmstrom Speaks in Brussels

03:30 GMT JP: 3mth Bills Auction

09:30 GMT IE: Bills Auction

09:30 GMT UK: Bills Auction

12:30 GMT - EU: ECB's Draghi Press Conference Post Rate Decision

14:00 GMT - NO: Norges Bank's Matsen Speaks in Oslo, Norway

14:00 GMT - NO: Norges' Matsen Speaks in Oslo

17:00 GMT - UK: BoE's Place Speaks in London

18:30 GMT - US: Fed Reserve Board Holds Open Meeting to discuss Final Rule for Banks


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