The strongest to the weakest of the major currency pairs
As the North American session begins, the NZD is the strongest and the EUR is the weakest of the major currencies. The USD is tilting to the downside.
Once again, the trading ranges for the day are very modest. Looking at the range today vs the 22 day average (month of trading):
EURUSD: 23 pips vs 50 pips average
GBPUSD: 36 pips vs 64 pips average
USDJPY: 45 pips vs 84 pips average
USDCHF: 21 pips vs. 46 pips average
USDCAD: 20 pips vs 55 pips average
AUDUSD: 22 pips vs 45 pips average
NZDUSD: 21 pips vs 43 pips average
Apart from the GBPUSD (57% of average) and USDJPY (53% of average), the ranges are all less than 50% of the month long average.
Klaas Knot, a prominent figure at the European Central Bank (ECB), made several significant statements regarding the ECB’s monetary policy outlook. He mentioned the possibility of utilizing interim meetings for rate cuts if upcoming data suggests a need for more aggressive action. Knot anticipates the ECB’s initial rate cut to occur in June, with further reductions likely in September and December. He emphasized that decisions made in September and December would benefit from new economic projections and data, which would aid in assessing the appropriate course of action for monetary policy. These comments suggest a cautious but flexible approach to monetary policy, with a readiness to adapt to changing economic conditions.
The economic calendar in the US is full of the potential to move the market with the weekly jobless claims (218K est. vs 217K last), US PPI (estimate 0.3% MoM and 1.1% YoY), retail sales (est. 0.8%) on tap at 8:30 AM ET. No Fed speakers today as the Fed is in the blackout period until the rate decision next Wednesday.
US stocks are trading higher in pre-market trading. The S&P in pre-market trading would be on pace to close at a new record. The Nasdaq index is up about 73 points which would erase much of the -87 point decline yesterday. The record-high close for the Nasdaq index is at 16274.94. Given the pre-market gain, the index would be about 20-25 points from a new record close.
European indices are mostly higher at the start of the US session.
US yields are modestly higher and near mid-range. The US coupon auctions for the week ended yesterday with a successful 30-year auction but yields did still move higher.
Crude oil is above $80 and looks to test the high from last week at $80.67. Above that the 50% midpoint of the move down from the end of September 2023 high at $81.37 would be targeted.
Bitcoin reached a new all time high at $73,794 but is back below the $73,000 level currently.
A snapshot of the markets as the North American session begins currently shows:
- Crude oil is trading up $0.73 or 0.92% at $80.45. At this time yesterday, the price was at $78.71
- Gold is trading down $5.61 or -0.26% at $2169. At this time yesterday, the price was at $2162.90
- Silver is trading down one cent or -0.04% at $24.98. At this time yesterday, the price was at $24.27
- Bitcoin currently trades at $72,900. The price reached a new all-time high at $73,794. At this time yesterday, the price was trading at $73,160
In the premarket, the major indices are trading higher. Yesterday the S&P and NASDAQ index closed lower. The Dow industrial average did rise yesterday:
- Dow Industrial Average futures are implying a gain of 170 points. Yesterday, the index rose 37.83 points or 0.10%
- S&P futures are implying a gain of 18.1 points. Yesterday, the index fell -9.98 points or -0.19%.
- Nasdaq futures are implying a gain of 76 points. Yesterday, the index fell -87.87 points or -0.54%
In the European equity markets, the major indices are trading mostly higher.
- German DAX, +0.30%
- France CAC , +0.79%
- UK FTSE 100, -0.05%
- Spain’s Ibex, +0.06%
- Italy’s FTSE MIB, 0.30% (delayed by 10 minutes).
Shares in the Asian Pacific markets were mixed:
- Japan’s Nikkei 225, +0.29%
- China’s Shanghai Composite Index, -0.18%
- Hong Kong’s Hang Seng index, -0.71%
- Australia S&P/ASX index, -0.20%
Looking at the US debt market, yields are marginally higher after rising yesterday post the US CPI data:
- 2-year yield 4.630% +1.0 basis points. At this time yesterday, the yield was at 4.615%
- 5-year yield 4.195%, +0.9 basis points. At this time yesterday, the yield was at 4.175%
- 10-year yield 4.195% +0.4 basis points. At this time yesterday, the yield was at 4.180%
- 30-year yield 4.352% +0.3 basis points. At this time yesterday, the yield was at 4.339%
- The 2-10 year spread is at -43.6 basis points. At this time yesterday, the spread was at -44 basis points
- The 2-30 year spread is at -27.7 basis points. At this time yesterday, the spread was at -27.8 basis points
European benchmark 10-year yields are mixed:
European benchmark 10 year yields