It was a quiet day in North American forex trading. The major currencies vs the USD are all within 0.24% of the closing levels from yesterday. The EUR is ending the day at the strongest of the majors. The JPY is ending as the weakest. However, relatively speaking the major currencies are all scrunched together. The USD is closing marginally higher but is ending virtually unchanged vs the CAD, AUD and NZD, higher vs the CHF, JPY and GBP, and lower vs the EUR.
The strongest to the weakest of the major currencies
The economic calendar was void of any US economic releases. The weekly EIA oil inventory data showed a larger than expected build of 5.851M, but recall that was off a -17.04M drawdown last week (record drawdown). Gasoline stocks and Distillates also showed larger-than-expected drawdowns this week, which negated the crude oil data. Technically, crude oil futures also broke above a key ceiling area going back to November 2022 between $82.44 and $83.43 which took the price to the highest level in over 8 months.
The inactivity today is probably influenced by what is to come tomorrow as US CPI data will be released. The expectations are for the headline number to show a 0.2% rise which is not all that bad, but that replaces a 0.0% unchanged reading a year ago. As a result, the YoY level will likely tick up to 3.2% to 3.3% from 3.0% last month. The core level is also expected to rise by 0.2% (same as last month). The YoY is expected to remain unchanged at 4.8%. If the Fed officials have a gripe it is the high services inflation.
Focus will once again be looking toward the ‘shelter’ component which did dip to +0.4% MoM last month (down from 0.6%), but remains up 7.8% YoY. Shelter accounts for some 34.6% of the CPI calculation. Energy prices are moving higher with the price of crude oil reaching the highest level since November today, but energy by comparison is only 6.87% of the CPI calculation. Food is up 5.7% YoY, but has been coming down of late with the last 3 months showing 0.0%, 0.2% and 0.1%. Food accounts for 13.43% of the CPI.
For a review of the CPI, CLICK HERE.
A look around the other markets heading into the close is showing:
- Crude oil is up $1.30 or 1.56% at $84.21
- Gold is down $9.32 or -0.48% $1915.52
- Silver is down $0.09 or -0.42% at $22.66
- Bitcoin traded back above 30,000 at $30,119, but has since rotated back down to $29,423
In the US a debt market the treasury auctioned off 10 year notes near the WI level. They will auction off 30 year bonds tomorrow. Depending on the CPI data that could be interesting. Yields today are mixed with the short and higher and the longer and lower. The 2 – 10 spread which narrowed to around -70 pips is back at -79 pips. The 2 – 30 year yield spread move to -57 pips yesterday but his back to -62.6 pips currently.
- 2 year yield 4.799%, +4.2 basis points
- 5 year yield 4.128%, +1.5 basis points
- 10 year yield 4.008%, -1.8 basis points
- 30 year yield 4.172%, -3.3 basis points
In the US stock market, the NASDAQ index continues to underperform. There was a midday rally, but indices have reversed back to the downside going into the close. Concerns about growth weigh on the indices:
- Dow Industrial Average -185 points or -0.53% at 35128
- S&P index -29.28 points or -0.65% at 4470.20
- NASDAQ index -162 point or -1.17% at 13722.01