The CAD is the strongest (closely followed by the USD) and the JPY is the weakest as the North American session begins. Stocks are higher and yields are also higher, reversing some of the declines from Friday (last week).
It is the day after the US jobs report which showed a gain of 114K jobs but revisions of -86K from prior months. The Unemployment rate did fall to 4.2% from 4.3% and earnings rose by 0.4%. The USD did rise on Friday, but the dollar index did fall for the week by -0.54%. With stocks moving lower, the AUDUSD fell -1.4% (USD rose 1.4%) and the NZDUSD fell -1.19% (USD rose that amount) as risk-off flows dominated and helped the USD despite yields moving lower.
That helped to send stocks lower with the Nasdaq index falling -2.55% for the day and -5.77% for the week. That was the worst week since January 2022. The other broad index fell -4.25% – it’s worst week since March 2023.
The US 10-year fell -2 basis points for the day, and tumbled.-19.5 basis points for the week. The 2 year yield tumbled -9.6 basis points, and tumbled -27.1 basis points. The 2-10 year spread moved into positive territory (it is currently +5.4 basis points) as the markets adjust to the Fed cutting rates more due to slower growth expectations.
Crude oil fell -$5.88 or -7.99%. That was the worst week since October 2023.
Eamonn is great at posting the weekend expectations and below are the string from today. Goldman sees 25 bps. Blackrock warns that 50 would be a signal of worry. JP Morgan thinks 50bps is the “right thing” and BofA chimed in with an extended series of cuts in the US and Canada.
Recall on Friday, Canada also reported their jobs data with a gain in jobs, but a decline in full time jobs (not a good mixed), and more importantly, the unemployment rate moved up to 6.6% from 6.4%. That was the HIGHEST since May 2017 outside of 2020 and 2021 Covid period.
A snapshot of the other markets as the North American session begins shows:
- Crude oil is trading up $0.96 or 1.43% at $68.63. At this time yesterday, the price was at $69.54
- Gold is trading down $0.22 or -0.01% at $2496.95. At this time yesterday, the price was at $2516.02
- Silver is trading up $0.19 or 0.71% at $28.12. At this time yesterday, the price is at $28.77
- Bitcoin is trading lower at $55,225. At this time yesterday, the price was at $55,993
- Ethereum is trading lower at $2311.70. At this time yesterday, the price was at $2372.70
In the premarket, the snapshot of the major indices are mixed after a mixed day yesterday
- Dow Industrial Average futures are implying a gain of 243 points.. On Friday the index fell -410.34 points or -1.01% at 40,345.42
- S&P futures are implying a gain of 34.33 points. On Friday the index fell -94.99 points or -1.73% at 5408.43
- Nasdaq futures are implying a gain of 126 points. On Friday the index fell -436.83 points or -2.55% at 16690.83
On Friday, the small-cap Russell 2000 fell -40.64 points or -1.91% at 2091.40
European stock indices are also rebounding to the upside today
- German DAX, +0.50%
- France CAC, +0.58%
- UK FTSE 100, +0.64%
- Spain’s Ibex, +0.66%
- Italy’s FTSE MIB, +0.92% (delayed 10 minutes).
Shares in the Asian Pacific markets closed lower:
- Japan’s Nikkei 225, -0.48%
- China’s Shanghai Composite Index, -1.06%
- Hong Kong’s Hang Seng index, -1.42%
- Australia S&P/ASX index, -0.32%
Looking at the US debt market, yields are little changed:
- 2-year yield 3.695% +4.6 basis points. At the same Friday, the yield was at 3.726%
- 5-year yield 3.529%, +4.1 basis points.. At this time Friday, the yield was at 3.516%
- 10-year yield 3.741%, +3.2 basis points. At this time Friday, the yield is at 3.700%
- 30-year yield 4.047%, +2.7 basis points. At this time Friday, the yield is at 3.984%
Looking at the treasury yield curve,
- The 2-10 year spread is +5.0 basis points. At this time yesterday, the yield spread was -3.0 basis points.
- The 2-30 year spread is +35.6 basis points. At this time yesterday, the yield spread was less 25.7 basis points.
In the European debt market, the 10 year yields are higher: