Stocks and yields move back lower
With stocks and bond yields heading back lower (gold higher and oil lower), the JPY is the Pavlovian "safe haven" (the strongest), and the CAD is the weakest. The USD has moved back lower after a strong day yesterday. The BOE cut rates by 0.50 bps after an emergency meeting. That action pushed the GBP lower on the headline, but the pound has since moved back toward levels seen before the cut (the GBPUSD moved to a low of 1.2822 and trades at 1.2930 currently).
Looking at the ranges and changes, the major currencies vs the USD are off low levels. The GBPUSD is trading mid-range and up about 5 pips. The EURUSD is higher but also near the middle of the day's trading range. The USDJPY is trading down about -100 pips but was down over 150 pips at the lows. JPY crosses are also off the low levels of the day with the GBPJPY down -120 pips which is about 1/2 of the -240 pips decline at the lows.
In other markets:
- Spot gold is trading higher with the price is currently up around 7 teen dollars and $0.50 or 1.07% at $1666.87
- WTI crude oil futures are trading down about $1 or -2.91% at $33.35. The private crude oil inventory data showed a build of 6.4M barrels. The DOE data will be released with expectations (perhaps now revised) at 1.7M build.
In the premarket for US stocks, the futures are implying a lower opening:
- Dow industrial average is trading down -778 points
- S&P index is trading down -91 points
- NASDAQ index is trading down -243 points
in the European equity markets, the major indices are trading higher. Recall the major indices closed near the lows midday yesterday. As a result they had a catch up after the sharp rise in the US markets yesterday afternoon. The major European indices are off high levels:
- German DAX, +0.6%
- France's CAC, +0.8%
- UK's FTSE 100, +0.2%
- Spain's Ibex, +0.49%
- Italy's FTSE MIB, unchanged
In the US debt market US yields are lower after the sharp run higher yesterday (10 year up about 25 bp yesterday). The 2 year yield is down -9 basis points and the 10 year yield is down -9.2 basis points. The yield curve is near unchanged from the close yesterday. The US treasury will auction off 10 year notes at 1 PM ET. The 3 year note auction was sloppy with the dealers being saddled with 44% of the issue.
In the European debt market, the benchmark 10 year yields are mixed with the German, France, UK yields higher and Spain, Italy and Portugal lower:
