As the North American session begins, a better tone is evident in the markets. The NZD and AUD are the strongest of the majors, while the USD and JPY are the weakest. That combination is congruent with “risk on” flows.
Indeed US stocks are higher in pre-market trading and European equities are also higher.
Yields in the US are lower (as are European yields) after the 10 year yield in the US moved to high of 1.97% yesterday. The U.S. Treasury will auction off 10 year notes at 1 PM ET. Meanwhile, Italian 10 year benchmark yields moved to within about 5 or so basis points of parity with the comparable US 10 year yield this week. The Italian 10 year yield has been below the US 10 year yield since October 2020, with the widest spread at 1.11% below the US yield at the widest (April 2021).
Bank of France’s Gov. Villeroy yesterday that markets have overreacted to Lagarde’s comments last week after the ECB meeting. ECBs Nagel gave it to March 1 for inflation to come down before voting for normalization. Tick. Tick. Boom.
The price of crude oil is down for the 3rd consecutive day (albeit a marginal decline) as hope for a easing of the tension in Russia/Ukraine continues. The private oil inventory data late yesterday showed a draw of crude oil of -2.025M barrels (vs expectations of the EIA data to show a 400K build). The EIA data will be released at 10:30 AM ET. PS production from OPEC remains below their quotas as nations continue to struggle with getting oil out of the ground fast enough. Tick. Tick. Boom.
Fed’s Loretta Mester and Michelle Bowman both speak today as does BOC Macklem. Atlanta Fed president Rafael Bostic will also be speaking on CNBC shortly.
IN other markets as North American traders enter for the day shows:
- Spot gold is trading up $1.07 or 0.05% $1826.60
- Spot silver is trading up three cents or 0.15% at $23.22
- WTI crude oil is trading down $0.28 at $89.08
- Natural gas futures are trading down $0.15 of $4.09
- The price of bitcoin is trading at $44,190. The high yesterday reached up to $45,501 before backing off.
The premarket for US stocks, the major indices are all higher after rising yesterday:
- Dow industrial average is up 220 points after yesterday’s 371.65 point gain
- S&P index is trading up 39 points after yesterday’s 37.67 point rise
- NASDAQ index is trading up 187 points after yesterday’s 178.79 point rise
In the European equity markets, the major indices are all trading higher:
- German DAX, +1.58%
- France’s CAC, +1.41%
- UK’s FTSE 100 +0.71%
- Spain’s Ibex, +1.5%
- Italy’s FTSE MIB +2.0%
In the US debt market, the yields are lower with the 2– 10 year spread remaining steady. The U.S. Treasury will auction of $37 billion of 10 year notes at 1 PM ET. Yesterday the three year note auction was a success as a result of a strong international demand.
In the European debt market, the benchmark 10 year yields are all lower as well.