The AUD is the strongest and the USD is the weakest as the NA session begins. ANZ business confidence increased to 1.5 from -3.7 last month. That helped to kickstart the NZDUSD to the upside and the AUD followed. The USD is lower – for a change – despite yields moving higher today. The 10 year yield is up 1.7 basis points for the 30 year is up 2.6 basis points. The shorter end shows the 2 year yield down modestly.

Oil prices are slightly lower currently, after trading to the highest level since August 10, 2020 to $95.03. The gains come on the back of a reduction in U.S. crude stocks that amplified concerns regarding a global supply shortage. Crude prices have surged by nearly 32% in the past three months, a trend attributed to production cuts by major oil producers Saudi Arabia and Russia. Although the rally experienced a brief interruption last week due to emerging economic and demand concerns, it regained momentum following a U.S. government report that revealed a more significant than anticipated drop in crude stockpiles yesterday. Nevertheless prices are currently down around $0.50 at $93.21

Trading of Evergrande shares were stopped in Hong Kong following a report that Chairman Hui Ka Yan is under police surveillance. The company, already facing a liquidity crisis and heavy debt, has been trying to restructure its offshore debt. However, the process hit a snag when it revealed an ongoing investigation into its mainland China division, preventing the issuance of new debt. This division also failed to make a 4 billion yuan payment recently. Since trading resumed after a 17-month suspension, Evergrande’s shares have plummeted by 81%. Ouch.

Looking at the key releases and events today, traders will be watching the weekly initial jobless claims which fell close to 200K last week. The market is expecting a modest rebound higher, but strong job growth remains a concern. At 10 AM, pending home sales will be released.

Feds Powell will speak at a town hall event with educators at 4 PM. Below is the full calendar

• 8:30am: USD Final GDP q/q

  • Detail: 2.2% forecast, prior 2.1%

  • USD Final GDP deflator Index q/q

  • Detail: 2.0% forecast, prior 2.0%

• 8:30am: USD Unemployment Claims

  • Detail: 214K forecast, prior 201K

• 9:00am: FOMC Member Goolsbee Speaks

  • Description: Speaking at the Peterson Institute of International Economics in Washington DC, audience questions expected.

• 10:00am: USD Pending Home Sales m/m

  • Detail: -1.1% forecast, prior 0.9%

• 10:30am: USD Natural Gas Storage

  • Detail: 90B forecast, prior 64B

• 1:00pm: FOMC Member Cook Speaks

  • Description: Pre-recorded closing remarks at the Minorities in Banking Forum in Dallas.

• 4:00pm: Fed Chair Powell Speaks

  • Description: Speaking at a town hall event with educators hosted by Federal Reserve in Washington DC.

A snapshot of the markets as the NA session gets underway shows:

• Crude oil is trading down $0.44 or -0.47% at $93.24
• Spot gold is trading up $0.77 after plunging over -$25 yesterday. Yesterday the price traded to the lowest level since March 13
• Spot silver is trading up $0.06 or 0.26% at $22.59
• Bitcoin is trading at $26,441. At this time yesterday, the price was trading at $26,265.

In the US premarket for US stocks, futures are implying that the major indices will open modestly lower after mixed results yesterday saw the Dow industrial average fall -0.20% while the NASDAQ index gained 0.22%:

• Dow Industrial Average futures are implying a decline of -6.27 points after falling -68.61 points yesterday
• S&P index futures are implying a loss of -5.5 points after gaining 0.98 points yesterday
• NASDAQ futures are implying a loss of -39 points after rising 29.24 point yesterday

In the European equity markets, the major indices trading mixed:

• German DAX, unchanged
• France’s CAC, +0.20%
• UK’s FTSE 100, -0.47%
• Spain’s Ibex, +0.53%
• Italy’s FTSE MIB, +0.18% (10 minute delay)

In the Asian Pacific today, equity markets closed mixed

• Japan’s Nikkei 225, -1.54%
• China’s Shanghai Composite, 0.10%
• Hong Kong’s Hang Seng, -1.36%
• Australia’s S&P/ASX 200, -0.08%

In the US debt market, yields are lower with the yield curve flattening

• 2-year yield, 5.135%, -0.6 basis points
• 5-year yield, 4.708%, +0.2 basis points
• 10-year yield, 4.642% +1.7 basis points
• 30-year yield, 4.759% +2.6 basis points
• 2 – 10 year spread is up to -49 basis points which is the least negative sinse May, while the 2 – 30 year spread is up to -37.6 which is its least negative level since May 24

In the European debt market, benchmark 10-year yields are trading sharply higher. While US 10 year yields are racing higher, equivalent German 10 year yields are still below 3% and France’s tenures are at 3.5%:

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