The strongest to weakest of the major currencies

The day after the Fed Chair testimony where the Fed Chair upped the expectations with his comments that the Fed would look to tighten by 50 bps at the next meeting, the USD is mixed. The AUD is the strongest of the majors, and the CHF is the weakest.

What we also know is the major currencies are all scrunched together with the biggest change being 0.39%. As a guide, during yesterday's trend day, where the USD was by far, the strongest of the majors, the biggest day change was the AUDUSD which fell -2.07%. The AUDUSD is having a modest correction from it's tumble yesterday after the RBA tightened by 25 basis points, but it was interpreted as a dovish hike (i.e., the end was near).

The Fed Chair will have the opportunity to tweak the interpretation of his views today as he moves to the House for testimony there. That will begin at 10 AM ET once again, and continues for a few hours.

However, barring a complete misinterpretation by the market, the only thing that would seem to stave off a 50 bp hike would be a big surprise in the jobs report on Friday (the PMI and the initial jobless claim data does not support that - expecting 225K), or a tumble in CPI inflation when it is released next Tuesday.

Today we start to get additional employment data with the ADP national employment report for February. The expectations are for 200K versus 106K last month. Last month's data was well off the 517K from the BLS. It seems the models are out of sync once again. Later at 10 AM the JOLTs job openings are expected to dip to 10.500M versus 11.012M last month. At the level it is still well elevated.

Also on the docket today is the Bank of Canada rate decision where they are expected to leave rates unchanged at 4.5% after signaling a conditional pause at the last meeting. That decision will also be at 10 AM.

US goods trade balance will be released at 8:30 AM ET

a snapshot of the market currently shows

  • Spot gold is trading marginally higher by $1.41 or 0.08% at $1814.70. Yesterday the price of gold tumbled around $33
  • Spot silver is up seven cents or 0.36% at $20.12
  • WTI crude oil is trading down $0.31 at $77.28
  • The price bitcoin is trading a tad lower at $22,007. Near 5 PM yesterday the price is trading at $22.67

In the premarket for US stocks, the major indices are trading little changed but higher after yesterday's declines

  • Dow Industrial Average up 11 points after yesterday's -574.98 point tumble
  • S&P is up 1.3 points after yesterday's -62.07 point decline
  • NASDAQ index is up 8.8 points after yesterday's -145.40 point decline

The European equity markets are mixed/modestly changed.

  • German DAX, +0.28%
  • France's CAC, -0.10%
  • UK's FTSE 100, -0.04%
  • Spain's Ibex +0.29%
  • Italy's FTSE MIB, +0.05%

in the Asia-Pacific equity markets:

  • Japan's Nikkei rose at 0.48%
  • China's Hang Seng index -2.35%
  • Shanghai composite index was little changed at -0.06%
  • Australia's S&P/ASX index felt -0.77%

In the US debt market, yields are higher in the shorter and in lower further out the curve

  • 2 year yield 5.04%, +3 basis points
  • 5 year yield 4.318% +0.4 basis points
  • 10 year yield 3.950% -2.5 basis points
  • 30 year yield 3.852% -3.6 basis points

The US two – 10 year spread continues to push into negative territory at -107.7 basis points

In the European debt market, the benchmark 10 year yields are lower:

European benchmark 10 year yields