The strongest to the weakest of the major currencies
As the North American session begins, the AUD is the strongest and the GBP is the weakest. The USD is mostly lower. The EURUSD is mixed ahead of their interest rate decision at 8:15 AM ET. ECBs Lagarde will conduct her press conference starting at 8:45 AM ET.
Despite the ECB implementing nine consecutive rate hikes, inflation in the eurozone has surged to over double the bank’s 2% target. However, growth has eased. There’s a decline in manufacturing, reduced lending, and the service sector is showing stress, raising fears of a potential recession. The upcoming rate decision by the ECB has sparked significant debate among experts with the decision being more of a toss up (see Adam’s post HERE). Eamonn posted that the ECB is set to raise inflation forecast which argues for an increase. While some believe the bank might not increase rates due to economic concerns, a report from Reuters suggests that the ECB might raise its inflation prediction for the coming year to more than 3%, making a case for another rate hike.
Also on the docket today in the North American session are the weekly jobless claims (225K estimate vs 216K last week. The US PPI data is also to be released with MoM Final demand expected at 0.4% versus 0.3% last month. The year on year is expected of 1.2% with the Ex food and energy at 2.2%. Those numbers are better than the CPI data that we saw yesterday. As if that wasn’t enough US retail sales will also be released at 8:30 AM with the expectations of 0.2% for the headline and 0.4% for ex autos. The control group is expected at -0.1% (versus 1% last month.
US stocks are trading higher ahead of the data and interest rate decision. Yields are also marginally higher out the curve. Oil prices are near 10 month highs
A snapshot of the markets as the NA session gets underway shows:
- Crude oil is trading up $1.22 at $89.74
- Spot gold is trading up down -$1.10 or -0.05% at $1907.28
- Spot silver is trading down $0.26 or -1.16% $22.56
- Bitcoin is trading at $26,460
In the US premarket for US stocks, major indices are trading higher
- Dow Industrial Average futures are implying a rise of 74 points after declining near that amount by -70.46 point yesterday
- S&P index futures are implying a rise of 13.75 points after yesterday’s 5.52 point gain
- NASDAQ futures are implying a rise of 61.73 points after a gain of 39.97 point yesterday
In the European equity markets, the major indices are trading lower ahead of the interest rate decision
- German DAX, -0.25%
- France’s CAC, -0.18%
- UK’s FTSE 100, up 0.65%
- Spain’s Ibex, -0.07%
- Italy’s FTSE MIB, -0.13% (delayed)
In the Asian Pacific today, equity markets closed mixed
- Japan’s Nikkei 225, rose 1.41%
- China’s Shanghai Composite, rose 0.11%
- Hong Kong’s Hang Seng, rose 0.21%
- Australia’s S&P/ASX 200, rose 0.46%
In the US debt market, yields are marginally higher
- 2-year yield, 4.983% unchanged
- 5-year yield, 4.390% unchanged
- 10-year yield, 4.260% +1.2 basis points
- 30-year yield, 4.359% +2.3 basis points
In the European debt market, benchmark 10-year yields are trading mostly higher:
European benchmark 10 year yields are lower ahead of ECB