The CAD is the strongest and the JPY is the weakest as the NA session begins | Forexlive
The CAD is the strongest and the JPY is the weakest as the NA session begins. The USD is higher/mixed with gains vs the JPY, GBP and EUR and declines vs the CAD, AUD and NZD. The US CPI will be released at 8:30 AM ET with expectations of 0.4% for both the headline and the core. The YoY is expected at 6.0% and 5.5%. Come in at those levels, and with stocks higher and worries about financial panic being abated (regional banks are sharply higher this morning), the storyline could shift to fast break the other way as far as rates go. What will stocks do if rates snap back higher? If rates stay down, the stock buyers are likely to return. Will the stocks focus return to higher rates again? How far do rates go? Will that be a negative for stocks?
We won’t get any help from Fed officials as they are in the blackout period before the interest rate decision next week. The chances for a 25 bp hike is up at 73%, the terminal rate for the end of the year is down to 4.235% after being at 5.4% last week. That’s too low. What has mortgage rates done? They moved from about 7.05% last week to 6.57% yesterday.
US yields are higher with the two year yield up 25 basis points after dipping below 4% yesterday. The two-year rate is up to 4.281%. That is still down from 5.085% last week.
Crude oil moved toward a new low for the year yesterday before bouncing, but has moved back to the downside today after settling yesterday at $74.08 yesterday. The low for the year is at $72.28. The low yesterday rate $72.30.
Stocks are higher in the US. European shares are also higher after sharp declines yesterday of over 2%.
The EURUSD has seen down and up trading today and trades near unchanged on the day. On the topside terms we watching the 1.0744 – 1.0752 swing area. Above that and the 50% midpoint of the move down from the February hide to the March low comes in at 1.0777 (see chart below). On the downside a the 1.0707 (and 1.0700 natural support level) will be more bearish in the short term.
A snapshot of the market currently shows:
- spot gold is is down $5.62 or -0.3% at $1907. That is up nearly hundred dollars from last week’s low of $1809
- spot silver is down $0.14 or -0.66% at $21.62
- WTI crude oil is trading down $1.30 at $73.51
- Bitcoin is trading at $24,868. A high price today reach $24,994. That was the highest level since February 21. The next key target comes in a $25,270. That was the high price for the year and the highest level going back to June 13.
In the premarket for US stocks, the major indices are higher after yesterday’s mixed results:
- Dow Industrial Average is up 176 points after yesterday’s -90.5 point decline
- S&P is up 25 points after yesterday’s -5.83 point decline
- NASDAQ index is up 73 points after yesterday’s 49.96 point rise
In the European equity markets:
- German DAX +0.91%
- Frances CAC +0.68%
- UK’s FTSE 100 +0.12%
- Spain Ibex +1.24%
- Italy’s FTSE MIB was a 0.61%
in the Asia Pacific market:
- Nikkei 225 fell -2.19%
- Hong Kong’s Hang Seng index fell -2.27%
- Australia’s S&P/ASX index fell -1.41%
- China’s Shanghai index fell -0.72%
In the US debt market, rates are higher with the shorter end up the most:
- 2 year yield 4.275% +24.5 basis points. The two year yield last week reached a high of 5.085%
- 5 year yield 3.82% +15.4 basis points
- 10 yield 3.620% +10.6 basis points. The 10 year yield last week reached 4.089%
- 30 year yield 3.733% or 6.7 basis points
- 2– 10 year spread is at -65 basis points. It reached a negative -110 basis points last week. The high yesterday reached -36.4 basis points.
In the European debt market, the benchmark 10 year yields are also trading higher: