As the North American session begins, the EUR is the strongest and the NZD is the weakest. The USD is mixed/little changed with gains vs the NZD, JPY, AUD and NZD, and declines vs the EUR, GBP and CHF. The US new home sales data for January will be released at 10 AM ET with expectations of 0.680M units vs 0.664M units last month. The Dallas Fed Manufacturing Business index will be released at 10:30 AM ET (last month -27.40).

ECBs Lagarde is scheduled to speak at 11 AM ET. In recent speaking engagements, Lagarde has described the fourth quarter of 2023 wage numbers as encouraging and emphasized a data-dependent approach for future decisions. She noted the importance of continued encouraging data in early 2024 and the necessity of confidence in sustainable disinflation. Despite the ECB’s independence from other central banks, Lagarde acknowledged subdued near-term activity but found it consistent with previous assessments. She stressed the ongoing disinflation process towards achieving a 2% inflation target but cautioned against premature decisions due to persistent strong wage pressures and insufficient evidence of inflation returning to the target. Lagarde’s focus remains on avoiding hasty actions that could lead to inflation resurgence.

ECB’s Yannis Stournaras is speaking and has reiterated his view that the first rate cut should occur in June, emphasizing that any adjustments to rates should be both small and gradual. He acknowledged the substantial progress made on inflation but stressed the importance of the ECB remaining data-dependent. Stournaras expressed a desire to see further progress, noting that negotiated wages are still at 4%. He mentioned that concrete evidence on wages would not be available until late April, suggesting a cautious approach. Consequently, Stournaras advocates for a wait-and-see stance on interest rates until June, indicating no further delays beyond that point.

Highlights this week on the economic calendar:

• US durable goods orders (Tuesday)
• Australia CPI (Wednesday in Australia))
• RBNZ rate decision (Wednesday in NZ)
• US GDP 4Q revised (Wednesday)
• US Core PCE 0.4% est (Thursday)

A snapshot of the markets as the North American session begins currently shows:

• Crude oil is trading down -$0.40 or -0.54% at $76.08. Last week, prices fell -2.51%
• Gold is trading down -$2.50 or -0.12% at $2032.91. Last week, the price rose 1.11%
• Silver is trading down -$0.40 or -1.77% at $22.53. Last week, the price fell -1.94%
• Bitcoin trades at $51,141. Last week, the price fell -1.08%, snapping a 4-week move to the up streak.

In the premarket, the US stocks the major indices are trading marginally lower after rising last week:

• Dow Industrial Average futures are implying a decline of -22.53 points. Last week, the index rose 1.30%. The index rose 0.16% on Friday.
• S&P futures are implying a loss of -4.55 points points. Last week, the index rose 1.66%. The index was up 0.03% on Friday
• Nasdaq futures are implying a loss of -6.60 points. Last week the index rose 1.40% despite a -0.28% decline on Friday.

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

• German DAX, unchanged. Last week, the index rose 1.76%
• France CAC -0.37%.. Last week, the index rose 2.56%
• UK FTSE 100, -0.29%. Last week, the index fell marginally by -0.07%
• Spain’s Ibex, +0.13%. Last week, the index rose 2.47%
• Italy’s FTSE MIB, -0.19% (delayed by 10 minutes).

Shares in the Asian Pacific markets were mixed after mostly higher levels last week

• Japan’s Nikkei 225, +0.35%. Last week, the index rose 1.59%
• China’s Shanghai composite index, -0.93%. Last week, the index surged 4.85%
• Hong Kong’s Hang Seng index, -0.54%. .Last week, the index rose 2.36%
• Australia S&P/ASX, +0.12%. Last week, the index fell -0.20%

Looking at the US debt market, yields are moving lower to start the trading weeK:.

• 2-year yield 4.690%, unchanged.. Last week, the yield rose 4.8 basis points
• 5-year yield 4.274%, -1.0 basis points. Last week, the yield rose 0.6 basis points
• 10-year yield 4.240% -2.0 basis points. Last week, the yield fell -3.1 basis points
• 30-year yield 4.358% -2.1 basis points. Last week, the yield fell -6.6 basis points
• The 2-10 year spread is at -32.4 basis points. At this time yesterday, the spread was at – 32.5 basis points
• The 2-30 year spread is at -14.5 basis points. At this time yesterday, the spread was at -15.6 basis points.

European benchmark 10-year yields are higher:

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