- ISM US December manufacturing index 58.7 vs 60.0 expected
- JOLTs job openings come in at 10.562 vs 11.075M estimate
- OPEC+ agrees to stick to planned 400K bpd output increase - report
- Canada November producer price index +0.8% m/m vs +0.8% expected
- Canada Markit December manufacturing PMI 56.5 vs 57.2 prior
- Fed's Kashkari expects two rate increases in 2022
- ECB's Villeroy says inflation is close to peaking in the eurozone
- Atlanta Fed GDPNow Q4 tracker 7.4% vs 7.6% prior
- UK PM Johnson: We will continue to listen regarding VAT on energy bills
- White House says it expects to have more to say on Fed nominations soon
Markets:
- Gold up $14 to $1814
- WTI crude up $97-cents to $77.06
- S&P 500 flat at 4796
- Nasdaq -1.2%
- US 10-year yields up 2 bps to 1.65%
- AUD leads, JPY lags
You could sense the nerves in the market as we settle into 2022. Bond yields moved up again and that boosted the dollar early but the prices paid component came down in the ISM manufacturing report, leading to a tempering of that trade. With that, the dollar fell as well.
Tech may also be weighing on the US dollar as the tide continues to go out on many of the mid-cap tech darlings. Mixed in with all that were flows around the new year
USD/JPY hit a five-year high at 116.34 as the yen takes a beating on yield differentials.
Elsewhere, the dollar didn't shine so brightly. Value trades did well and that theme helped commodities and commodity FX. AUD/USD rose 40 pips from the European lows to 0.7242, wiping out yesterday's loss. USD/CAD fell to 1.2700 from 1.2760 as Canada returned from holiday.
Cable tried the upside, hitting 1.3557, which is the highest since Nov 9. But it couldn't close above last week's high as it slipped back to 1.3531.
Gold sagged early and briefly fell below $1800 but found its legs as the day wore on, hitting $1815 late in Europe and holding that through the end of the day.
The euro wasn't able to take advantage of the soft dollar. Villeroy downplayed eurozone inflation as the market continues to struggle to define any kind of theme in euro trading.
