Forex news for North American trade on Sept 14, 2021:
- US August CPI +5.3% y/y vs +5.3% expected
- Tropical Storm Nicholas douses Texas but larger worries further on the horizon
- Former BOC Gov Poloz: The Canadian economy is in pretty good shape, sees upside CAD risks
- ECN Schnable: We do not expect inflation to be persistently too high
- Canada manufacturing sales for July -1.5% versus -1.0% estimate
Markets:
- Gold up $10 to $1804
- WTI crude down 3 cents to $70.15
- US 10-year yields down 4.7 bps to 1.277%
- S&P 500 down 29 points to 4439
- JPY leads, AUD lags
The story in markets today was simple enough in the early going. US CPI was lower than expected and the dollar fell. Core CPI rose just 0.1% compared to 0.3% expected. The dollar fell around 30 pips initially across the board and later extended that to 50 pips.
However the move wouldn't last. When equity markets opened (higher at the time) the sentiment quickly began to shift. Stocks began to struggle and the mood quickly shifted towards risk aversion. That meant buying in JPY, CHF and USD.
The moves extended as the day wore on. There wasn't a clear catalyst but you could point to China, bottlenecks or options activity. There are plenty of things to worry about in the economy and September is the weakest month on the calendar historically.
Cable touched a five-week high after CPI but ended up finishing solidly lower on the day.
The general theme on the charts is the halting of USD losses rather than big bullish USD signs. One exception in AUD/USD, which is down to a two-week low.
It all bears very close watching as the dip buyers that have prevailed throughout the year have suddenly been swamped by sellers that are repeatedly catching equity futures markets off guard at the open.
