Risk off flows return in up and down market
The JPY is the strongest and the AUD is the weakest as NA traders enter for the day. The flows are following the risk off protocol today as stocks fall in reaction to heightened coronavirus fears. The Senate passed the PPP extension. Retail sales and employment in Germany, and PMI data in Europe were generally better but the EUR is still lower on the day. The USD is higher vs all major currencies this morning with the exception of the JPY.
The USDJPY and the JPY pairs are trading near or at the session lows as the NA session gets underway. The EURUSD has traded mostly lower. The AUDUSD is trading at the session lows as it loses steam on risk off fears. The ranges overall are mostly modest with the major pairs - with the exception of the USDJPY - with low to high trading ranges much lower than the 22 day averages (about a month of trading).
In other markets:
- Spot gold is trading up $0.50 or 0.03% at $1781.29
- WTI crude oil futures are trading plus $0.42 or 1.07% at $39.72
In the US stock market the premarket futures are trading lower:
- Dow industrial average -234 points
- NASDAQ index -49 points
- S&P index, -21 points
In the European equity market the major indices are trading lower
- German DAX, -1.5%
- France's CAC, -1.4%
- UK FTSE 100, -1.1%
- Spain's Ibex, -1%
- Italy's FTSE MIB, -1.5%
In the US debt market yields are trading higher with the yield curve steepening a few basis points. The 2 – 10 year spread has moved to 52.69 basis points from 50.76 basis points at the close yesterday.
In the European debt market, the benchmark 10 year yields are moving to the upside with Germany and France leading the way at 4.6 basis points and 4.3 basis points to the upside. The better data at of Europe this morning has helped to push the yields higher.
The ADP employment report for June is expected to come out and show a 2900K increase. The US employment report will be released a day early on Thursday due to 4 July holiday in the US on Friday.
