Citi

Choppy price action through the FX complex today as narrow ranges under-score a majority of G10 and Asia FX. KRW is an exception to this, as the currency underperforms with the KOSPI (-1.4%), as foreign outflows in the domestic equity market ($2.3bn MTD) suppresses sentiment. South Korea continues to grapple with a worsening outbreak and chip shortages.

The USD trades at levels close pre-CPI as the knee-jerk sell-off post print has retraced; an unsurprising move given the ‘miss’ did not nearly provide enough evidence for a shift in Fed taper rhetoric which last night was also bolstered by a strong July PPI reading.

US initial jobless claims printed alongside expectations at 375k (387k prior revised higher). Continuing claims maintain their descent to arrive at 2866k (2900k expected; 2980k prior revised higher). The data bodes well for signs of potentially less tight labour markets as enhanced unemployment benefits continue to be rolled back throughout the country. As a reminder, federal PUA benefits are set to sunset this September. Our economists suggest the employment backdrop will have a clearer picture when further state-level data is released in mid-August.

Credit Agricole

Asia overnight Risk sentiment was mixed in Asian hours. While US stock futures are trading broadly flat at the time of writing, most regional stock market indices are trading slightly lower. This comes after US stocks posted another record high closing as of yesterday. G10 FX has been trading broadly range-bound with risk sensitive currencies such as the AUD and NZD being among the mild outperformers. Data wise it was quiet. If anything, manufacturing sector-related business activity data out of New Zealand, which came in stronger, may have attracted some attention. However, with consensus expectations already being fully in line with hawkish policy action when the RBNZ will announces monetary policy next week, currency impact proved fairly limited.