December 12, 2017

As the North American traders enter for the day, the AUD is the strongest currency while the USD is the weakest.

We are a day closer to the Fed tightening by 0.25% (the market has it pegged at 100% chance). They will start their meeting today. It is Janet Yellen's final meeting as Fed chair. The Fed decision is not the only central bank meeting this week. The SNB, BOE, ECB and Mexico Central bank will all meet on Thursday.

Today is the special election in Alabama and will have eye's focused on the results. The Republicans hold a slim 52-48 lead in the US Senate. A 51 to 49 majority does not give a lot of wiggle room for the GOP.

US PPI will be released at 8:30 AM ET, the DOE will release their crude outlook at 12 AM ET/1700 GMT, and the treasury will auction a 30 year bond at 1 PM ET/1800 GMT. Yesterday's auction of 10 year notes were not all that great.

The Senate and House continue to meet and say they will propose their blended package at the end of the week and will be ready to vote on it sometime next week. It still remains a risk for the market in the makeup of the package and of course the vote.

The ranges for the major pairs is varied with action in the GBPUSD as a result of the inflation data today. The AUDUSD which has been trending to the upside (it moved above the 100 hour MA and the 200 hour MA now) are doing the best.

In other markets:

  • Spot gold in his trading up a $1.50 or +0.12% $1243.43
  • WTIcrude oil futures are up $.50 or 0.86% at $58.49. Brent crude oil is up $1.01 or 1.55% at $65.69
  • US yields are a little bit higher with the yield curve getting flatter in the process. Two-year 1.835%, +1.6 basis points. 5 year 2.165%, +0.8 basis points. 10 year 2.392%, +0.3 basis points. Thirty-year 2.777%, unchanged. As mentioned above the U.S. Treasury will auction off thirty-year bonds today
  • US stocks flat to up modestly in early trading. the S&P futures are up 2.25 points. The Dow futures are up from 56 points. The NASDAQ composite index is down my 0.25 points. Both the Dow and S&P closing record levels yesterday.
  • In Europe yields are mostly higher. Germany 0.308%, +1.5 basis points. France 0.641%, +1.8 basis points. UK 1.223%, +2 basis points. Spain 1.445%, +3.2 race points. Italy 1.683%, +2.8 basis points
  • European stocks are mostly higher: German DAX up 0.2%. France CAC up 0.4%. UK FTSE of 0.25%. Spain down -0.2%. Italy +0.48%