The strongest to the weakest of the major currencies
The NZD is the strongest and the CHF is the weakest as the NA session begins. The USD is mixed to start the trading day after closing last week mixed. Last week was highlighted by a slew of central bank rate decisions including the Fed (unchanged but with a hawkish bias), the BOE (unchanged with the expectations for a 50/50 change), SNB (unchanged vs expectations of a 25 basis point hike), and BOJ (no change as expected). This week, US durable goods and Fed Powell speaks on Wednesday. The core PCE data out of the US will be released on Friday along with University of Michigan consumer confidence. Australian retail sales on Thursday, preliminary CPI data out of Europe on Thursday will also highlight some of the key events this week.
On Captiol Hill, congressional leaders are working on solving the budget impasse before the October 1 deadline when the federal government may run out of operational funds. Both Democrats and Republicans have expressed concerns about not reaching an agreement. Despite this, GOP leader Kevin McCarthy is optimistic about avoiding a shutdown. McCarthy faces opposition from conservatives on issues like taxation, spending, and support for Ukraine. A proposal for a 45-day funding extension has met resistance. This budget issue follows a recent near-crisis over the U.S. debt limit. Hardline Republicans and Trump supporters have shown discontent with the debt-ceiling resolution.
Good news for the entertainment industry, the Hollywood writers’ union and major studios have tentatively agreed to end their strike. The deal offers writers more royalties and AI protections. While the Writers Guild of America (WGA) supports the deal, it awaits member ratification. The WGA also backs the actors’ union, SAG-AFTRA, in its ongoing talks. Hollywood executives hope this agreement will aid SAG-AFTRA negotiations.
Bad news, Ford Motor stated that while some progress has been made, significant issues remain before a labor agreement with the United Auto Workers (UAW) union can be reached. The UAW, which noted “real progress” with Ford, has expanded strikes against General Motors and Stellantis to 38 parts centers in the U.S. These strikes began on Sept. 15 and have grown to involve over 18,000 workers. The Detroit Three automakers have proposed a 20% raise over 4.5 years, but the UAW wants a 40% raise and other benefits. President Joe Biden will visit Michigan to support the workers, while Donald Trump will address the UAW strike. Oh my. The ongoing strikes have caused parts shortages, leading to temporary layoffs at GM and Stellantis plants.
US and European stocks are moving lower today. Yields are higher. Gold and crude oil are near unchanged
A snapshot of the markets as the NA session gets underway shows:
- Crude oil is trading down $0.10 or -0.12% at $89.93
- Spot gold is trading down $0.50 of -0.02% at $1924.24
- Spot silver is trading unchanged at $23.55
- Bitcoin is trading at $26,083. At this time on Friday the price was trading at $26,644.
In the US premarket for US stocks, futures are implying that the major indices will open lower after the S&P and NASDAQ closed lower for the 3rd consecutive week last week. All 3 of the major indices closed below their 100-day moving average last week after Friday’s modest declines:
- Dow Industrial Average futures are implying a decline of -56 point after Friday’s fall of -106.58 points
- S&P index futures are implying a loss of -9 points after Friday’s fall of -9.94 points
- NASDAQ futures are implying a loss of -33 points after Friday’s fall of -12.18 points
In the European equity markets, the major indices trading solidly lower:
- German DAX, -0.91%
- France’s CAC, -0.86%
- UK’s FTSE 100, -0.88%
- Spain’s Ibex, -0.98%
- Italy’s FTSE MIB, -0.79% (10 minute delay)
In the Asian Pacific today, equity markets closed mixed
- Japan’s Nikkei 225, rose 0.85%
- China’s Shanghai Composite, fell -0.54%
- Hong Kong’s Hang Seng, fell -1.82%
- Australia’s S&P/ASX 200, rose 0.11%
In the US debt market, yields are mixed with the shorter-end steady while yields are higher with a steeper yield curve. The 2 – 10 year yield is at -61 basis points which is about 6.7 basis points steeper than Friday’s close
- 2-year yield, 5.118%, -0.5 basis points
- 5-year yield, 4.599% +2.9 basis points
- 10-year yield, 4.504% +6.5 basis points
- 30-year yield, 4.608% +8.7 basis points
In the European debt market, benchmark 10-year yields are trading higher.
US European yields are higher