The strongest to the weakest of the major currencies
As the North American session begins, the JPY is the strongest and the USD is the weakest. The JPY pairs are all leading the way today with the USDJPY the biggest mover at 0.76%. However, there are oversized gains in the JPY vs the other major currencies as well.
In the UK soft retail sales pressured the GBP today with the GBPJPY, and GBPAUD the biggest movers (retail sales came in at -0.3% vs +0.5% estimate).
Yesterday, I posted on GBPJPY (“The GBPJPY dips to the 100 hour MA and pauses. Can the price break below?). That pair had been holding support at the 100 hour MA. Yesterday, there were a number of tests, however, the bounce could not sustain momentum above a swing level at 187.17. The MA was broken, tested one last time and then fell sharply breaking below the trend line, 200 hour MA, swing area between 185.87-96 and tested the 38.2% of the move up from the end of October low.. The battle is now on between the the 200 hour MA and the 38.2% retracement (see chart below).
For the USDJPY, it consolidated in the Asian session, but moved lower as European traders started to enter for the day. The price fell below the 150.00 level and returned to the low from early November at 149.18. Buyers have been leaning against that level. On Monday, the USDJPY got within 3-4 pips of the 2022 high (highest level in 32 years. In between there was down and up volatility, but yesterday, and today, there has been sharp moves lower.
The Fed Speak calendar for the day includes several key events featuring Federal Reserve members.
- At 08:45ET, Collins, a 2025 voter, will discuss “Rethinking Full Employment” at a Boston Fed event. Concurrently, Barr, another voter, will participate in a discussion on “Payments” at the Clearing House Annual Conference 2023.
- At 09:45ET, Goolsbee, a 2023 voter and known dove, will give remarks on the economy at a closed Annual Community Bankers Symposium at the Chicago Fed.
- Later at 10:00ET, Daly, a 2024 voter with dovish tendencies, will deliver the closing keynote at the 33rd Frankfurt European Banking Congress.
- The day concludes with Collins, once again, in a CNBC interview at 10:15ET.
On the economic calendar today, US building permits and housing starts will be released at 8:30 AM ET. Canada PPI data will also be released.
US stocks are higher, yields are lower, oil is higher.
A snapshot of the markets as the NA session gets underway shows:
- Crude oil is trading up $0.85 or 1.20% at $73.96. At this time yesterday, the price was trading at $76.18
- Spot gold is trading up $7.66 or 0.40% at $1989. At this time yesterday, the price was trading at $1964.92
- Spot silver is trading up $0.30 or 1.27% at $24.01. At this time yesterday, the price was trading at $23.60
- Bitcoin is trading at $36,528. Yesterday, the price was trading at $37,143
In the US stock market, the major indices are trading higher in pre-market trading. All three major Wall Street indices are still on track for their third consecutive positive week. Recent market sentiment has been supported by favorable data on consumer and wholesale prices in October, raising hopes that the Federal Reserve might be nearing the end of its prolonged campaign of interest rate hikes. However, whether this optimism can persist in the coming weeks remains a subject of debate among investors.
- Dow Industrial Average futures are implying a gain of 110 points. Yesterday, the index fell -45.74 points or -0.13% at 34945.48. The Dow industrial average is up 1.93% for the week.
- S&P index futures are implying a gain of 12 points. Yesterday the index rose 5.34 points or 0.12% at 4508.23. Teh S&P is up 2.11% on the week
- NASDAQ futures are implying a gain of 16 points. Yesterday the index rose 9.84 points or 0.07% at 14113.67. The Nasdaq is up 2.29% for the week.
In the European equity markets, the major indices are trading mixed
- German DAX, 0.87%
- France’s CAC, 0.86%
- UK’s FTSE 100, 0.80%
- Spain’s Ibex, 0.67%
- Italy’s FTSE MIB, 0.73% (10 minute delay)
In the Asia Pacific market, major indices closed lower on the day:
- Japan’s Nikkei index, 0.48%
- China’s Shanghai Composite Index, 0.11%
- Hong Kong’s Hang Seng index, -2.12%
- Australia’s S&P/ASX index, -0.13%
In the US debt market, yields are marginally higher after yesterday’s sharp declines
- US 2Y T-NOTE: 4.826% -1.6 basis points. At this time yesterday, the yield was at 4.886%
- US 5Y T-NOTE: 4.396%, -3.0 basis points. At this time yesterday, the yield was at 4.485%
- US 10Y T-NOTE: 4.406% -3.9 basis points at this time yesterday, the yield was at 4.498%
- US 30Y BOND: 4.583% -3.9 basis points. At this time yesterday, the others at 4.661%
- 2 – 10-year spread is at -42.6 basis points. This time yesterday, the spread was at -38.4 basis points
- 2 – 30 year spread is at -24.6 basis points basis points. This time yesterday the spread was at -22.1 basis points
In the European debt market, benchmark 10-year yields are trading lower:
